Dying? Doing the final Income tax return.

John_Pierpoint

This is a slightly philosophical legal question, I need to know the answer because I have a problem with the administration at Barclays bank where a dead relative had some savings. I don't want to "demand" something that Barclays is within its rights to refuse to give me.
The details of "old Mr dog's" relationship with Barclays are here
http://forums.moneysavingexpert.com/showthread.html?p=19168513&highlight=paralysed#post19168513.

First an aside: Back in the 1980's my favourite building society was Cheltenham & Gloucester - they were run by a computer man and their computer used to write to me regularly as the tax year end approached with a letter that said:
"We note we will be paying you xxx GBP in interest in February/March or April/May. We have noted that tax changes taking place on 6th April would mean that if you change the date on which interest is paid on this account you will save xx GBP in tax - please sign & return the attached authorisation." (or words to that effect). That is what I call service.
Now perhaps they were forced into doing it. Some pretty sharp cookies invested with C&G, who would have closed and reopened their account to crystalise their interest.

So why don't banks close dead peoples savings accounts as at date of death and reopen them as "The personal representatives of ..........." while awaiting the grant of probate/letter of administration? What actually happens is that a letter comes with the return of the death certificate and is says "Balance at date of death xxxx accrued interest not yet posted to the account yyy"
The executor is expected to add the xxxx & yyy and pay the 40% IHT on the combined sum. What is more when the yyy is eventually added to the account it will have 20% tax taken off. Would you call this double taxation or am I missing something?
If they crystallised the interest payment and TAX at the date of death, at least the personal representatives would have a chance of getting some Income tax back when filling in the final self assessment tax return.

Now turning to the specific problem of Barclays where Mr Dog kept his nest egg, Barclays have been sending him a monthly cheque as income. Unfortunately I don't know the full details because I have found it impossible to track down intelligent life at Barclays in the last 5 months, so I can reconcile the payments.
However can Barclays have paid out say 3,000 GBP of "income" and still claim that no tax has yet been deducted?
Perhaps I might be able to get back some of the tax when I do the "trust" Income tax return by claiming the "trust" has been grossly over taxed ?
Not that "trusts" get nice big meaty personal allowances like a pensioner in their 90's.

John.

"Remember, there is no logic to tax it is just a complex mess of arbitrary rules".