The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Personal representatives are responsible for finalising the deceased’s tax affairs. They must file outstanding tax returns and claim any repayments due.
For many estates where the deceased’s tax was deducted under PAYE on pensions or employment, a refund is likely to arise because the deceased is entitled to the personal allowances for the whole 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 are up to date with tax returns and accounts, and the date in the tax year on which death occurs.
You should review the tax position at an early stage in the administration, and bear in mind that PRs are personally liable for both unpaid tax and losses to the estate, which arise because they have omitted to claim tax refunds. Although it is not necessary to finalise income tax affairs before applying for probate, you will need to calculate the position in order to include a refund due (asset) or liability in the Inheritance Tax account, IHT400.
Usually, the Registrar will inform HMRC of the death when it is registered. HMRC will write to the deceased’s last address if it has not been provided with other contact details.
The ‘Tell Us Once’ service is available in most local authorities throughout England, Wales and Scotland. It is not yet available in Northern Ireland. It is an optional government service which advises all relevant government departments of a person’s death. Apart from HMRC, it includes the Department for Work and Pensions, public sector pension schemes, Passport Office, Driver and Vehicle Licensing Agency and the local council. If available in the area, instructions for using the service are offered when the death is registered.
If the PRs, or their advisers, have not used the Tell Us Once service and have not been contacted by
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