I understand that the period between a person's death and the final conclusion of the probate process and distribution of the bequests is treated specially for tax purposes, and that the assets and income are in trust held by the executors.
I have a number of questions however regarding details:
1) Is date of death regarded as the cut-off point? ie income received before that date becomes part of the estate and therefore subject to IHT, but income received afterwards is outside the estate?
2) Should income received post death therefore be apportioned, if it partly relates to a pre-death period ?
3) Presumably the trust created for the administrative period is liable for tax. Is it taxed as an individual, with an allowance, or a trust, with a reduced allowance, or does it not have an allowance?
4) I understand that funeral costs are a charge on the estate, not the administrators. Does that mean these costs offset IHT? What other costs can similarly be included - probate costs, solicitor's fees, travel, etc ?
5) If not, can they be offset against income during the administration period? But not both, presumably?
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