Estate Accounts: A Guide for Executors

What estate accounts are - and what they are not

Estate accounts are not a formal statutory requirement for most estates. You will not be prosecuted for failing to produce them. But every residuary beneficiary has the right to request them, and failing to produce a clear and accurate record is a common source of disputes between executors and beneficiaries.

Estate accounts are a clear, organised record showing beneficiaries three things: what came into the estate, what went out of the estate, and what remains to be distributed. They are not trading accounts, not a tax return, and not an audit. For most simple estates, a clearly laid out document using plain English is perfectly sufficient.

For larger or more complex estates, some executors choose to engage an accountant or solicitor to prepare the accounts. This is particularly worth considering if the estate is subject to significant income during administration, if there are multiple beneficiaries with different entitlements, or if any beneficiary is likely to scrutinise the accounts closely.

The three sections every set of estate accounts needs

Format and presentation

There is no prescribed legal format for estate accounts for most simple estates. What matters is that the accounts are clear, accurate, and complete. A well-organised Word document or spreadsheet is perfectly acceptable.

• Date the accounts clearly. State the period of administration they cover (from date of death to date of completion) and the date the accounts were prepared.

• Label each section clearly. Capital account, income account, and distribution account should be clearly separated and headed.

• List each asset separately. Do not aggregate bank accounts unless they are at the same institution. Beneficiaries want to see the detail.

• Explain any unusual items. If there is an expense that a beneficiary might question, add a brief note explaining it. Transparency prevents disputes.

• Consider professional help for complex estates. If the estate involves significant income during administration, multiple different beneficiary entitlements, trusts, or large sums, a qualified accountant or solicitor should be asked to prepare or review the accounts.

How to prepare estate accounts, step by step

1. List every asset at its date-of-death value. Use the written balances from banks and providers and the probate valuation of any property: the same figures you used for the probate application and Inheritance Tax.
2. Record what each asset actually realised. A house rarely sells for exactly its probate value, and shares move. The capital account shows both figures so beneficiaries can see the difference.
3. Deduct debts and costs. Debts at death, the funeral, the probate fee, valuations, sale costs, any Inheritance Tax and your own out-of-pocket expenses. Keep a receipt for each.
4. Add the income account. Interest, dividends and rent received after the death, less any tax and costs of earning it. If the estate's income in a tax year is £500 or less, there is nothing to report to HMRC.
5. Work out the residue and each share. Net capital plus net income, less legacies, gives the residue. Split it exactly as the will (or the intestacy rules) says.
6. Reconcile to the bank. Every pound in and out of the estate account should appear once. The accounts are right when the distribution account ends at £0.
7. Send them for approval, then pay. GOV.UK says final estate accounts should be approved and signed by you and the main beneficiaries. Pay the residue once they have agreed, and get a receipt for each payment.

Worked example: a simple final estate account

An invented estate, to show the executor account format with real numbers. The person died in 2026 leaving a house, two bank accounts and Premium Bonds. The will leaves £5,000 to a grandchild and the residue equally to two children. The estate is below the £325,000 nil-rate band, so no Inheritance Tax is due.

The figures check out when the distribution account ends at £0: every pound that came in is shown going out. The £526 is the probate application fee for an estate over £5,000. Your own accounts will have more lines, but the shape stays the same.

Capital or income? Where common items go

The question executors ask most when filling in the executor account format is which column an item belongs in. The rule of thumb: anything the person owned or owed at the moment of death is capital; anything the estate earns after the death is income.

Simple estates with little income often show one combined account instead. That is fine, as long as beneficiaries can follow every figure. Where a will gives one person the income and another the capital (a life interest trust), keep them strictly separate and take advice.

Interim accounts and interim payments

On a long administration, beneficiaries may ask for money before everything is finished. You can make an interim distribution from money you are sure the estate will not need for debts, tax or possible claims. Record it, get a signed receipt, and show it as a payment already made in the final distribution account.

You are not obliged to pay early: the law says an executor is not bound to distribute the estate before one year from the death (Administration of Estates Act 1925, section 44). Claims under the Inheritance (Provision for Family and Dependants) Act 1975 must normally be made within six months of the grant, so many executors keep back enough to cover any risk until then. A short interim statement (what has come in, what has been paid, what is held back and why) keeps beneficiaries informed in the meantime.

When to prepare the accounts

The final estate accounts are prepared at the end of the administration, once all assets have been collected in, all debts and taxes have been paid, and you are ready to make the final distribution. But keep the record as you go: note every payment in and out of the estate account, with its receipt, as it happens. Reconstructing months of transactions at the end is where most mistakes creep in.

The typical sequence is: prepare the accounts in draft, send them to the beneficiaries for review, address any queries, obtain signatures on the final version, and then make the distributions. This order protects you - making payments before beneficiaries have signed off on the accounts can create disputes about what was agreed.

Getting beneficiaries to sign: protecting yourself as executor

Before distributing the residue, ask each residuary beneficiary to sign a copy of the estate accounts confirming they have received them, they are satisfied with the accounts, and they consent to the distribution shown.

This signed receipt is your primary protection if questions are raised after the distribution. An executor who can produce signed accounts and receipts from all beneficiaries is in a very strong position. An executor who distributed without written sign-off is in a much more vulnerable one.

The Probate Starter Pack includes the two letters for this stage: template 8, the proposed final distribution letter, which sends the accounts and asks each beneficiary to approve them, and template 9, a beneficiary receipt.

If a beneficiary refuses to sign or raises concerns, address the issue before distributing. Read our guide on beneficiary rights to understand what beneficiaries are entitled to request and how disputes are typically resolved. For more on how the residue is calculated and distributed, see our guide on the residuary estate.

Tax during administration

Income earned by the estate during the period of administration is taxable. HMRC treats income earned by the estate as assessable on the personal representatives (that is, you as executor). For most simple estates with modest amounts of income, HMRC handles this informally on correspondence without requiring a formal return.

However, if the estate earns significant income during administration - for example, from a rental property, a large investment portfolio, or a long administration period - you may need to file form SA900 (estate income tax return). If you are uncertain, contact HMRC's trusts and estates helpline or seek professional advice before making the final distribution.

Income tax paid by the estate can affect how much is available for distribution. Make sure any income tax liability is settled before preparing the final distribution account. For more detail on dealing with HMRC throughout the process, read our guide on executor duties.

Estate accounts: common questions

Is there an official estate accounts template in the UK?

No. There is no prescribed legal form for estate accounts in England and Wales. Any clear document or spreadsheet will do, as long as it shows the assets, the debts and costs, any income, and how the estate was distributed.

What format should executor accounts be in?

Most executors use three sections: a capital account (assets less debts and costs), an income account (interest and dividends received after the death), and a distribution account showing legacies and each share of the residue. Date the accounts and list each asset separately.

Do beneficiaries have to sign the estate accounts?

The law does not require it, but executors normally ask each residuary beneficiary to sign to confirm they approve the accounts before the final payment. The signed copy protects you if questions come up later.

Who is entitled to see the estate accounts?

Every residuary beneficiary is entitled to see them. A beneficiary who receives only a fixed legacy is usually told only about their own gift.

Is there a free estate accounts template I can download in Word or Excel?

The layout on this page is free to copy into Word, Excel or Google Sheets: a capital account, an income account and a distribution account, with the worked example showing how they fit together. If you would rather not build the formulas yourself, the Estate Accounts Workbook in the Probate Starter Pack is a ready-made Excel file.

Do estate accounts have to be sent to HMRC?

No. Estate accounts are for the beneficiaries. HMRC deals separately with any Inheritance Tax and with the estate's own income and gains. If the estate's income in a tax year is £500 or less, you do not need to report it to HMRC.

Can I pay part of an inheritance before the final estate accounts?

Yes, as an interim distribution, but only from money you are sure the estate will not need for debts, tax or possible claims. Record it, get a signed receipt, and show it in the final distribution account. The law does not require you to distribute before one year from the death.

How long should I keep estate accounts?

Keep the accounts and supporting documents for at least 12 years after the administration is complete, because some claims against executors can be brought up to 12 years later.

What to keep and for how long

Once the administration is complete, keep all supporting documents for at least 12 years. This includes:

• All correspondence with banks, institutions, HMRC, and beneficiaries

• Asset valuations and date-of-death balance confirmations

• Receipts for all expenses and all distributions

• Signed copies of the estate accounts from each beneficiary

• The probate application, the grant, and all sealed copies

• Any IHT correspondence and forms submitted to HMRC

Claims against executors can be brought up to 12 years after the relevant transaction in some circumstances. Retaining documents protects you for the full period. Store them securely - either physically in a labelled file or digitally with backups.