Thank you for that.
With regards ***** ***** would you agree with the quote below in that only interest at a lower rate should accrue from date of death if the executor had no funds with which to satisfy legal rights with?
(c) Legal rights in a deceased's estate. The general rule under Scots law has been that legal rights carry interest from the date of death. However, the question of entitlement to interest must be distinguished from the question of the appropriate rate of interest. Where there has been delay in payment which is not attributable to any fault on the part of the executors, it has been held that interest should not run at a rate higher than that which the funds have in fact earned.32 On the other hand, where a claim has been made, or where there is no doubt that legal rights will be claimed because the claimant has been disinherited, the courts have awarded interest at the "legal rate" (ie 5 per cent), apparently on the basis of wrongful withholding.
You mention 3%, in the above they mention 5% and from HMRC quote below they talk about "below commercial rate" and up to 7%!
Would you say that the legitim could force the executor to pay out 7%?
The rate of interest payable on legal rights (IHTM12221) has been a matter of uncertainty in the past and can still cause problems. There is no fixed rate, although the Scottish Law Commission have recommended that the rate of interest payable on legal rights should be fixed, in line with the arrangements in place regarding the prior rights financial provision which does carry a fixed rate of interest. It is accepted that the rate of interest payable is somewhat below commercial rates.
Payment of the same rate appropriate the prior rights cash provisions is considered to be acceptable which is 7% or something close to that. If a significantly higher figure is suggested as being appropriate, and the matter is material, you should refer the case to Technical.
Is TAX due on this interest?