Intestacy Rules: '50k Increase In Lump Sum Payments For Bereaved Spouses And Civil Partners

• Published date: 19 July 2023
• Subject Matter: Tax, Family and Matrimonial, Inheritance Tax, Wills/ Intestacy/ Estate Planning
• Law Firm: UHY Hacker Young LLP
• Author: Mr Graham Boar

On 26 July the Administration of Estates Act 1925 (Fixed Net Sum) Order 2023 will come into effect.

This order serves to increase the 'fixed net sum' in paragraph (B) of case (2) of the Table in section 46(1)(i) of the Administration of Estates Act 1925(1) is to be '322,000

Translated into English, that means the value which will pass to a surviving spouse of a taxpayer who died without a will, before the remainder of that taxpayer's estate is shared between the surviving spouse and the children of the deceased, will increase to '322,000.

Currently that amount is '270,000 making this an increase of just over 19%.

Many taxpayers are surprised that when a married person dies without a will, the surviving spouse doesn't simply inherit everything. In part, I think that myth is perpetuated by the fact that in so many cases that's exactly what happens.

Often there'll be a house in joint ownership which passes to the surviving spouse not because of the intestacy rules, but because they are the surviving joint owner of the property.

Joint bank accounts are treated similarly.

Pensions or trust funds are often applied for the benefit of the...