Deceased’s tax position

By Tolley in association with Donald Pearce-Crump

The following Trusts and Inheritance Tax guidance note by Tolley in association with Donald Pearce-Crump provides comprehensive and up to date tax information covering:

  • Deceased’s tax position
  • Income tax
  • Working out taxable income
  • Computation of income tax
  • Capital gains tax

Income tax

When an individual dies, he is liable to income tax on the income that arises in the period starting on 6 April before his death and ending with the date of death. He is also liable to capital gains tax on the disposal of any of his property in that period. This note describes how to quantify that income and calculate the tax due.

Working out taxable income

Generally speaking, taxable income in the year of death is calculated in the same way as for any other tax year. However, there are a number of special rules that have to be considered and these relate mainly to the time at which income and deductions are taken into account. This is important for deciding whether the income arising is that of the deceased or that of his personal representatives (who are charged to income tax in a different way from the deceased himself).

For all sources of income, the usual basis of assessment rules apply, and most questions about calculation and recognition can be resolved by reference to them. A number of sources of income are considered below. These highlight rules that are in point only because the taxpayer has died.


Earnings are assessed on a receipts basis. So if earnings are received (or remitted to the UK) after a person’s death, they are not included in taxable income. The same principle applies in the case of taxable termination payments received after death.

ITEPA 2003, s 18

For details of the receipts basis, see the Employment income guidance note in the Personal Tax module (subscription sensitive). The remittance basis is discussed in the Remittance basis ― overview guidance note in the Personal Tax module (subscription sensitive).

Pensions and social security income

Pension income and

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