Statement of Practice 2 (2004)
Published 20 August 2004
© Crown copyright 2004
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Expenses incurred by personal representatives
1. Following consultation with representative bodies, the scale of expenses allowable under Taxation of Chargeable Gains Act (TCGA) 1992 s 38(1)(b), for the costs of establishing title in computing the gains or losses of personal representatives on the sale of assets comprised in a deceased person’s estate, has been revised. The Commissioners for HM Revenue and Customs (HMRC) will accept computations based either on this scale or on the actual allowable expenditure incurred.
2. The revised scale is as follows:
| Gross value of estate | Allowable expenditure |
|---|---|
| A. Not exceeding £50,000 | 1.8% of the probate value of the assets sold by the personal representatives |
| B. Over £50,000 but not exceeding £90,000 | A fixed amount of £900, to be divided between all the assets of the estate in proportion to the probate values and allowed in those proportions on assets sold by the personal representatives |
| C. Over £90,000 but not exceeding £400,000 | 1% of the probate value of the assets sold |
| D. Over £400,000 but not exceeding £500,000 | A fixed amount of £4,000, to be divided as at B above |
| E. Over £500,000 but not exceeding £1,000,000 | 0.8% of the probate value of the assets sold |
| F. Over £1,000,000 but not exceeding £5,000,000 | A fixed amount of £8,000, to be divided as at B above |
| G Over £5,000,000 | 0.16 per cent of the probate value of the assets sold, subject to a maximum of £10,000 |
3. The revised scale takes effect where the death in question occurred on or after 6 April 2004.
Expenses incurred by corporate trustees
4. Following consultation with representative bodies, HMRC have agreed the following scale of allowable expenditure under TCGA 1992 ss 38 and 64(1) for expenses incurred by corporate trustees in the administration of estates and trusts. The Commissioners for HMRC will accept computations based either on this scale or on the actual allowable expenditure incurred.
5. The scale is as follows:
Transfers of assets to beneficiaries etc
- (i) publicly marketed shares and securities:
- (A) 1 beneficiary - £25 per holding transferred
- (B) 2 or more beneficiaries between whom a holding must be divided - as (A), to be divided in equal shares between the beneficiaries
- (ii) other shares and securities - as (i) above, with the addition of any exceptional expenditure
- (iii) other assets - as (i) above, with the addition of any exceptional expenditure
For the purpose of this Statement of Practice, shares and securities are regarded as marketed to the general public if buying and selling prices for them are regularly published in the financial pages of a national or regional newspaper, magazine, or other journal.
Actual disposals and acquisitions
- (i) publicly marketed shares and securities - the investment fee as charged by the trustees
- (ii) other shares and securities - as (i) above, plus actual valuation costs
- (iii) other assets - the investment fee as charged by the trustees, subject to a maximum of £75, plus actual valuation costs
Where a comprehensive annual management fee is charged, covering both the cost of administering the trust and the expenses of actual disposals and acquisitions, the investment fee for the purposes of (i), (ii) and (iii) above will be taken to be £0.25 per £100 on the sale or purchase moneys.
Deemed disposals by trustees
- (i) publicly marketed shares and securities - £8 per holding disposed of
- (ii) other shares and securities - actual valuation costs
- (iii) other assets - actual valuation costs
6. This scale takes effect for transfers of assets to beneficiaries, actual disposals and acquisitions, and deemed disposals by corporate trustees on or after 6 April 2004.