Oooph. That’s a tricky one. So feasible, and yet there’re somethings that don’t quite click. Ok, I’m gonna take it. Disclaimer: please don’t take this as legal advice as I’ve never been a lawyer, and I’m a rusty not a lawyer at that and this was never my area of not law. That out the way:
First, why do you need to wait for grant of probate if you applied for Letters of Administration? Long time since I’ve looked at wills & testate, but surely it’s one or the other?
Second, there are a couple of simple facilities to pay off IHT aren’t there? Direct Payment Scheme from bank or wherever via form IHT423 allows you to pay out directly from the Estate to HMRC before LoA granted, right?
If there’s property involved, you’d normally have the right to pay IHT in instalments annually over a decade, you just tick the option on your IHT400 tax return when you submit it wouldn’t you?
And you can get an Executor’s Loan can’t you? Hard to see how those options leave you with any catch 22.
Third, none of this comes out of your pocket as the Administrator, right?
Fourth, the Deed of Arrangement - I think you mean what’s usually referred to as a ‘Variation’, can be the simplest document that exists in law, can’t it? No legal formality required, it can just be a letter that fulfils these requirements, no?
If you’re doing something simple isn’t it a piece of piss to do yourself and something a high-street lawyer would do quickly and not in the slightest for megabucks (and am I right that a bank might do it for even less?)?
Fifth, a Variation can be done before or up to 2 years after Letters of Administration, right, so irrelevant to receipt of Letters of Administration?
So much for my suspicion, along with it sounding very like some disingenuous article I once read in the Telegraph, that this is made up - how can an educated person actually implicated in administration of what is quite a simple task in a simple area of law which is explained simply, by everyone from HMRC to the CAB, make so many fundamental mistakes?
To top it off, one of the reasons you’d set up a Variation would be to make a Trust. How can someone setting up a Variation not know that? Admittedly, Trusts is a confusing area of law and you might reasonably want to engage a lawyer (or bank I think), but it shouldn’t cost much and could save the beneficiaries thousands or even everything in tax; but you have responsibility as Administrator to know about the facility, it might even be negligent not to, right?
With which, as well as giving yourself away (or I suppose exposing you as the world’s most incompetent Administrator) haven’t you also proved Sir L’s point, that “nobody who is anybody pays inheritance tax these days” and that you could easily set up a Trust to administer these assets - all stuff the HMRC would tell you themselves?
