Administration
– See Letters of Administration.
Baseline Amount
– The net estate minus the applicable nil rate band. It is used to assess how much must be left to charity for the rest of the estate to be taxed at the reduced rate of 36%.
Capital Transfer Tax (CTT)
– Replaced Estate Duty for deaths from 13 March 1975. The lifetime gift part of the tax began on 13 November 1974.
Confirmation (Scotland)
– See Probate.
CTT
– See Capital Transfer Tax.
Deed of Variation
– A procedure to change a will after a death. All the beneficiaries have to agree and it has to be done within two years of the death. The procedure can be used to reduce Inheritance Tax and to change the way married couples leave their property.
Estate
– The property and money left by someone who has died.
Estate Duty
– A tax on estates introduced in the 19th century. It was simplified in 1949 and replaced by Capital Transfer Tax on 13 March 1975.
Executor
– The person appointed in a will to wind up the estate of someone who has died. Usually a beneficiary of the will, sometimes a professional such as a bank or solicitor. A female executor is sometimes called an ‘executrix’.
Exempt Gifts
– Gifts made before death that are within the rules to be exempt from Inheritance Tax whenever the donor dies.
Gift with Reservation
– A gift made before death but which the donor of Benefit (GROB) maintains an interest in. Such a gift will still count as part of their estate at death.
GROB
– See Gift with Reservation of Benefit.
Inheritance Tax Allowance
– The informal phrase for nil rate band or threshold.
Intestate
– Someone who dies without a valid will is said to be intestate.
Joint Owners (Scotland)
– See Tenants in Common.
Joint Owners with Survivorship
(Scotland)
– See Joint Tenants.
Joint Tenants
– Where two or more people own a property jointly. On the death of one, the other becomes the owner of the whole property. In Scotland, this is called ‘Joint Owners With Survivorship’. See also Tenants in Common.
Letters of Administration
– The equivalent of probate when a person dies without a will. Sometimes abbreviated to ‘admons’.
Lifetime Gift
– Any gift made before death but normally one that exceeds the gifts that are exempt. See also Potentially Exempt Transfer.
Nil Rate Band
– The threshold at
which Inheritance Tax starts to be due
on an estate. Also called the Inheritance Tax Allowance.
Notice of Severance
– The process of changing the ownership of a
property from Joint Tenants to Tenants in Common.
Potentially Exempt Transfer
– A gift made before death that is not an Exempt Gift.
Probate
– The process of winding up an estate after a death, paying the Inheritance Tax and getting permission to distribute the assets to the beneficiaries.
Tenants in Common
– Two or more people who own a property and where each owns a specific share, usually half, which they can then separately leave to their heirs. In Scotland, this is called ‘Joint Owners’. See also Joint Tenants.
Testator
– The person who makes a will. A woman is sometimes called the ‘testatrix’.
Threshold
– See Nil Rate Band.
Trust
– A legal arrangement where property is owned or controlled by trustees on behalf of someone else.
Will
– The legal document that gives instructions as to how your property is to be disposed of after your death.
Witness
– A person who signs a will stating that they have seen the testator signing it.
