Estate Accounts: What They Are and How to Prepare Them

What estate accounts contain

Estate accounts are not statutory accounts in the same way as company accounts — there is no prescribed format. However, professional practice follows a standard structure:

• Introductory narrative: Names of executors and beneficiaries, date of death, type of grant (probate or letters of administration)
• Capital account: All assets at probate value and all capital expenditure (debts, funeral costs, administration costs, taxes) showing the net capital available for distribution
• Income account: All income received during administration (interest, rent, dividends) and income tax paid, showing net income available for distribution
• Distribution account: How the residue is divided among beneficiaries (showing each beneficiary's entitlement before and after tax)

Supporting schedules may include a full asset schedule, debt schedule, administration cost schedule, and inheritance tax computation.

The capital account

The capital account starts with all estate assets at probate value and then deducts all capital outgoings:

Any gains or losses on realisation of assets (compared to probate value) are also noted. For CGT on gains, see our CGT on inherited assets guide.

The income account

The income account records all income received during the administration period and the income tax paid on it:

• Bank and savings interest (gross)
• Rental income (gross) and associated expenses
• Dividends received
• Income tax paid to HMRC on SA900 return
• Net income available for distribution

For the income tax during administration, see our income tax estate administration guide and SA900 guide.

The distribution account

The distribution account shows how the total estate (capital + income) is divided among beneficiaries. For each beneficiary, it shows:

• Their entitlement (fraction or percentage of residue)
• Their share of capital (before any income tax implications)
• Their share of income (gross and net of tax)
• The total to be paid to them

An R185 (Estate Income) form should be issued alongside the accounts for each beneficiary receiving income. See our beneficiary receipt guide for the receipt process.

Getting beneficiary approval

Before distributing the estate, the executor should send the estate accounts to all beneficiaries and request signed approval. Beneficiaries are entitled to:

• A copy of the accounts
• A reasonable period to review them (typically 2–4 weeks)
• Ask questions and receive answers

Once all beneficiaries have signed the accounts (or a covering approval letter), the executor can proceed to distribute. The signed approval gives the executor a discharge — if a beneficiary later claims the accounts were wrong, the signed approval is strong evidence that they accepted them at the time.

For disputes about estate accounts, see our guide to beneficiary disputes and executor accounts.

Recording executor expenses

Executors are entitled to recover out-of-pocket expenses from the estate (unless the will says otherwise). These must be documented and included in the estate accounts:

• Travel costs (reasonable, supported by receipts)
• Postage and stationery
• Certified copy fees (Probate Registry)
• Storage costs for estate chattels
• Insurance premiums for estate property during administration

Executors are not entitled to charge for their time unless the will expressly provides for this or they hold a professional charging clause. For professional advisers acting as executors, the charging clause in the will must be checked.

Record keeping

All supporting documentation for the estate accounts should be retained:

• Bank statements for the estate account
• Closing balance letters from banks and investment platforms
• Property sale completion statements
• HMRC correspondence (IHT, income tax, CGT)
• Invoices for all costs and fees
• Signed beneficiary receipts

Records should be retained for at least 12 years after the administration closes — the limitation period for most claims against an executor. For the record-keeping obligations when closing the administration, see our closing accounts after distribution guide.

For the full post-grant process, see our what to do after grant of probate guide and estate administration checklist. For applying for probate, see our applying for probate guide. For the complete probate context, see our complete UK probate guide 2026. Farra can help — get started here.