Where to put this on a Tax Return

bertsilver

A relative died in 2008 and left me some money, I have just received 2 R185 forms from the Inland Revenue.

One is for the year ending 5 April 2009, and the other is for the year ending 5 April 2010.

Do I put both sets of figures on the tax return?

I am a self employed non tax payer.

dzug1

You haven't received the forms from the Inland Revenue - you've received them from the executors of the estate

You should include the figures in your tax return for the year in which you received the money.

If you have only just received the money it's possible the forms are incorrect. They are supposed to when the estate paid you, not the year the estate paid the tax.

bertsilver

Yes sorry got them from the executors of the estate.

I received the money after I had put in my 2008/09 tax returns.

So I just use the figures on the R185 for the year ending 5 April 2010, and ignore the other one, because that tax year has gone.

dzug1

Assuming that it makes no difference to the tax you would owe, then that's simplest.

I would say that if the income is just interest on investments and share dividends then they go in the main return under the appropriate heading. You can tick NO to the box about income from estates and do not need the estates, etc, pages.

John_Pierpoint

We have been round this loop recently:
https://forums.moneysavingexpert.com/discussion/2729317

My bet is that bertsilver has an executor who does not know that the system was changed when Self Assessment came in.
Bert gets the income and the potential extra tax liability as and when he receives a payment from the estate. The system assumes that every attempt is made to pay him INCOME before he gets paid any capital.

We know nothing about the estate, the nature of Bert's interest in the de facto trust, of Bert's personal tax position. Perhaps this will push Bert into higher rate tax (40%) or loss of benefits or loss of additional personal allowance (30% tax for the over 65's).

Has the estate had to pay Inheritance Tax?

bertsilver

As a non tax payer all I'm trying to do is claim the tax back, but not sure where to put it on the Self Assessment return.

googler

Tell me if I'm missing something, but if the executor has settled any inheritance tax due, and has distributed the estate to the beneficiaries, what further tax should the beneficiaries be paying?

John_Pierpoint

If you are a "residuary" beneficiary (ie you get some of what is left after other specific bequests have been paid).
&
If you do normal (paper) self assessment you send the tax man this form, having put the figures on the back.
http://www.hmrc.gov.uk/forms/sa107.pdf
The instructions are here:
http://www.hmrc.gov.uk/worksheets/sa107-notes.pdf

If the will says something like "I leave the tenanted field known as "home pasture" to Bert........." and the R185 amount represents the rental income from the field, then you put the figure into the "property" bit of of your Self Assessment return.

As you were not able to use the previous year's R185; I think I would have a quiet word with with the executor, pointing out that you should have had the form by the end of May, and get him/her to replace the 09/10 R185 with one showing both 08/09 & 09/10 added together; unless the extra money puts you into a different tax category for 09/10 fiscal year..

Am I right in assuming that the R185 shows only savings income and perhaps company dividend income and it looks like this:
http://www.hmrc.gov.uk/pdfs/r185_ti.pdf

[Mea culpa: see below for the latest Estate version of trust income]

[Once upon a time there was a small manilla form roughly A5 size, then there was as ghastly plumb pink thing, but now we have a tasteful complex R185 in Self Assessment colours]

Be a bit careful over the dates on it because you will notice that the form was revised this year !

There still seems to be a semantic problem over re-payable: you cannot reclaim advance corporation tax (10%) paid on UK dividends. Its a bit like the Americans talking about "flammable" and English people talking about "inflammable".

bertsilver

Thanks for that it’s allot clearer now.

The R185 that I have looks nothing like the one in your link.

John_Pierpoint

googler wrote: »

Tell me if I'm missing something, but if the executor has settled any inheritance tax due, and has distributed the estate to the beneficiaries, what further tax should the beneficiaries be paying?

The R185 reports the income earned by the de-facto trust that exists while the executor/administrator is sorting out the estate. As this could well have taken a year or more, each beneficiary should get an R185, for each tax year, telling them how much of the money, paid to them during the tax year, was income, earned by the assets of the estate.

This new source of (taxed) trust income, is just like any other income such as rents, savings interest, company dividends etc. and the beneficiaries have to report this new source of income.
(Provided the new source of taxed income does not change their tax affairs, there is nothing interesting for the over worked tax man.)

In this case Bert is trying to reclaim over paid tax.

John_Pierpoint

bertsilver wrote: »

Thanks for that it’s allot clearer now.

The R185 that I have looks nothing like the one in your link.

What does yours look like?

Its not a half sized pale brown one or a plumb pink A4 one (both of which are obsolete?)

I suppose some firms, doing probate, might have a dispensation to print their own format, like some employers print a multi-purpose P60 ?

Does your one look like this:
http://www.hmrc.gov.uk/pdfs/r185.pdf

Actually this appears to be the latest version:
http://www.hmrc.gov.uk/pdfs/r185_ei.pdf