Accounting for Farm Estates - The Nuts & Bolts for Probate Professionals

Introduction

Are you unsure about angles of preparing the accounts of a deceased estate? What of the impact of MTD for ITSA?

Are you frustrated by the lack of technical guidance on farm accounts, especially in view of the complexity of farm operations and different activity?

This new virtual classroom seminar will look at the basic requirements and layout and will provide you with a broad understanding of accounting for estates in the context of the probate rules, from small estates to large estates with a working business (e.g. a farm). The emphasis throughout will be on farm estates and accounts.

You will learn who is entitled to receive accounts and how to prepare a set of accounts from the core accounting records that are ‘real time’, and other information (if any) provided by your clients and what information must be asked for by the accounts preparer at a very early stage from the executor.

The understanding of the inheritance tax reliefs and impact of the 2024 Budget and 23 December 2025 £2.5million will feature as well as the restrictions on distribution and the associated recording in the accounts.

What You Will Learn

This live and interactive course will cover the following:

• The importance of the accountant’s approval certificate explaining the scope of the accounts work and information supplied
• The starting point of the probate valuation together with the collection of assets and liabilities and adjustments due to changes
• The distinction between capital and income on farm activities
• Estate cash account - and cashflow requirements, especially around IHT liabilities
• Interpretation of the legal occupation of property - impact on accounts disclosure
• Responsibilities of executors, trustees and accountants with regards to accounts
• The letter of engagement and need for clear instruction and understanding of what has to be produced
• The starting point of the probate valuation and pressures on those values of what has to be produced
• The need to understand the users of the accounts and what they are looking for
• Estate double entry for accounts and interaction of improving estate software
• The main accounts and how they interact with the following:
• Estate at death account
• Estate capital account
• Estate income account
• Investment schedule, sales and income
• Property schedule, sales and income (matched to expenses)
• Distribution statement for each beneficiary
• Balance sheet date and preparation
• Estate cash account and solicitor’s estate account
• The distinction between capital and income and accounts disclosure
• Sale of estate assets - how to treat gains (and losses) on assets and investments from probate valuations - interaction with capital gains tax
• Impact of Budget 30 October 2024 and 23 December 2025
• Understanding the 100%/50% impact on APR/BPR
• Chattels reconciliation and “farm junk” now shown in the accounts
• The impact of the living farm business on the estate accounts
• Inheritance tax calculation and disclosure in the estate accounts
• Importance of protecting IHT reliefs
• The new transferable 100% BPR/APR allowance at £2.5million impact on calculation of the IHT liability
• Possible errors that probate will have on the trading accounts to date of death and how to deal with those errors

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.