When a person dies, the named executor (or executors) of the Will steps in to deal with the administration of the estate. The executor’s responsibilities generally include collecting and valuing assets, arranging the funeral, applying for probate, and distributing the remainder of the estate in accordance with the Will.
The following provides an overview of property transfers from the executor to the beneficiary where property is gifted through a Will.
What is a Grant of Probate?
A Grant of Probate is a document issued by the Supreme Court which certifies the validity of a will. It also confirms the authority of the executor(s) named in the will to administer the estate.
All estate assets listed in the Will are held on trust from the date of death until probate is obtained from the Supreme Court.
An application to obtain probate generally takes three weeks to complete but may be longer if further information is required.
Once probate is granted, the executor must submit a Transmission Application to transfer the deceased’s share of the property to the executor. This is done via a solicitor or conveyancer through PEXA, an online conveyancing portal.
The following documents are required for a transmission application:
- Grant of probate
- Death certificate
- Certificate of Title
- Statutory declaration
- Verification of identity
- Client authorisation
Once the transmission application is completed on PEXA, the executor then becomes the legal owner of the property and holds the property on trust for the beneficiaries.
Upon completion of the transmission application, a further property transfer application is required to complete the property transfer from the executor to the beneficiary. A solicitor or conveyancer can assist with the transfer process, and any professional fees associated with the transfer may be deducted from the estate.
Do I have to pay Stamp Duty?
Generally, all property transfers are subjected to duty under the Duties Act 2000 unless an exemption applies. For an exemption to apply in the inheritance of property scenario, the property must be transferred strictly in accordance with the Will.
This means if A leaves property to B in their Will, and the property is transferred to B, then the transfer would have been in accordance with the Will and no duty applies.
However, if the property is transferred to C instead of B there may be significant capital gains tax and stamp duty implications.
It is always recommended you should have independent financial advice before effecting the transfer between executor and beneficiary as it may be beneficial to hold the property on trust for a certain period.