We have an estate which we took over conduct from another firm of solicitors. The deceased died in September 2002, he left a number of pecuniary general legacies, some of which were paid in full, some of which were paid in part due to the funds being tied up in investments. We are now in funds and need to calculate interest on late payments. Our understanding is that interest runs from the date on which the legacy is payable (one year from the testator’s death, there was no contrary direction in the Will). The right to interest is subject to the provisions of the Limitation Act 1980, so only 6 years interest can be recovered. We have had advise from a litigator that the 6 year period will run backwards, from the moment we can pay the monies out, but we were under the believe that the 6 year period runs from the end of the executors year. There is a huge difference in the amount of interest payable as interest rates in recent years have been very small compared to the interest rates in place back in 2003 onwards.
Has anyone had a similar situation, or can anyone give me any guidance or thoughts on how to calculate the interest?
Dominic Mills & Co
It must be the most recent six years - i.e. a beneficiary could not claim for interest arising more than six years ago because it is statute barred.
Osborne Clarke LLP
Unless an acknowledgement of debt has been give in the meantime
I seem to recall that the Limitation Acts bar legal action to recover a
debt, but do not cancel the debt itself - and that there are reported cases
in favour of trustees/PRs who have chosen to pay statute-barred debts.
Furthermore, in this case my initial thoughts are that any monies not spent
on interest [on general legacies] would be due to the residuary legatee(s);
so presumably the RLs claim to that interest [against the PRs] is also
If the PRs do wish to consider matters fully, I appreciate that it would
not be appropriate for all relevant facts to be shared on this forum; but
from the initial post it would seem that payment of general legacies in
full was delayed for investment reasons - presumably for the benefit of the
RLs, and it is not clear why some general legatees were paid in full
instead of all receiving payment pro-rata. Perhaps equity would expect
those who lost out originally should now receive interest for the full
period from the executor’s year to date of payment?