IHTM35190 - Surviving spouse or civil partner elects to take a lump sum on intestacy (England and Wales)

Under S.47A Administration of Estates Act 1925 the surviving spouse or civil partner ( IHTM11032) of an intestate has the right to require the personal representatives to redeem the life interest by paying a capital sum. The right has to be exercised within twelve months of the issue of the grant of letters of administration or such longer time as the Court may allow

When a surviving spouse or civil partner exercises that right

• it is not a transfer of value, IHTA84/S17 (c), and
• the provisions of IHTA84/S145 have the effect as if the surviving spouse or civil partner, instead of being entitled to a life interest, had been entitled to a sum equal to the S.47 AEA capital value.

This means that you should give spouse or civil partner exemption on the capital sum that the surviving spouse or civil partner has received rather than on the part of the estate that the spouse or civil partner would otherwise have had a life interest in.

Where this applies, you should ask the taxpayer to explain how they have arrived at the capital sum and then refer the case to the Actuarial Group for advice.

The rules for calculating the capital value of the "spouses" or "civil partners" interest in the residuary estate are prescribed by the Intestate Succession (Interest and Capitalisation) Order 1977 (SI1977/1491) as amended.