The following Private Client guidance note provides comprehensive and up to date legal information covering:
The personal representatives (PRs) are responsible for finalising the deceased's tax affairs. They must file outstanding tax returns and claim any repayments due. For the majority of estates where tax was deducted at source on investments (prior to 6 April 2016) and under PAYE on employment income and pensions, a refund is likely to arise because the deceased is entitled to the personal allowances for the whole tax year, and not just for the portion of the tax year up to the date of death. The tax position of those within Self Assessment will depend on their sources of income, whether they were up to date with tax returns and accounts and the date in the tax year on which death occurred. For information on the current rates of tax and allowances, see Practice Note: Key UK tax rates, thresholds and allowances for Private Client.
PRs should review the deceased's tax position up to the date of death as soon as possible as they will need to include an estimate of any underpayment or overpayment of tax on the inheritance tax (IHT) return as a liability or an asset of the estate. PRs should also bear in mind that they are liable for any tax otherwise chargeable on the deceased and this may be settled out of the deceased’s assets.
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