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Tax Tips for Estate Administration –1.

Income tax to date of death

Administering an estate of someone who has died has a number of different aspects to it that need to be dealt with by the executor or personal representative of the estate. One of these is reporting the death to HM Revenue and Customs and checking the income tax position of that person from 6 April to the date of death and, depending on circumstances a year or maybe more before death.

‘Tell Us Once’

A good place to begin is to use the ‘Tell Us Once’ service using the unique reference number that will be provided to you when you register the death. This is a service which means that you can notify a death to most government organisations in one telephone call or through the online system. You have 28 days from the date of registration of the death to complete this application. This system will notify HM Revenue and Customs who will then write to you as personal representative. If you don’t use the ‘Tell us Once’ service, you can contact the HM Revenue and Customs bereavement helpline by phone or write to them.

If the person who had died was completing Self-Assessment tax returns, then HM Revenue and Customs will probably issue a tax return to be completed from 6 April to the date of death. If there are any outstanding tax returns from previous years, they will let you know that you need to complete these as well. If they were not completing tax returns HM Revenue and Customs will calculate any tax due to or from the estate for you. When you get these calculations, it is really important that you look at them carefully to check that all the income that you are expecting is on the calculation.

Many estates where tax has been deducted from pay or pensions under PAYE will be due an income tax repayment to date of death, which is a good incentive to check the tax position carefully.

If you need any advice, please call us on  0800 84 94 101