Filling in HMRC form R27 following death of relative

Lieutenant_Thrift

Hi,

My dad died last year and I took it upon myself to do as much as possible in winding up his estate to save on solicitor's fees. By sending out letters to the places he had accounts, we saved about £200.

I also said I would look into completing the R27 form to see if my dad was owed any tax when he died which he may well have as he complained a lot about the amount of tax he was paying as a pensioner.

My big problem I have is that it's over a year later and I'm still not quite so sure where to begin. Will I have to approach his bank for an appraisal of his income for the five years up to his death and then enter these details on the form? Would it be worthwhile just going back to the solicitor and asking them to do it? I asked how much it would be and they said they could not quantify how much it would cost.

Any advice would be much appreciated.

Thanks,

LT

John_Pierpoint

The bank won't be much help, of you already have statements showing ithe ins and outs of his money; however you need to identify all the sources of his inco0me; perhaps he has roll up arrangements for other accounts or share purchase schemes for dividends?

That is just a grubby little paper form, It usually covers just the 6th of April until the date of death. It is the tax man's equivalent of doing some calculations on the back of an envelope.
Unlike marriage for a woman, death for both sexes give a whole years allowances, so it works out usually that the autumn is the best time to die, tax wise.

There is nothing to stop you re-opening you dad's previous years if you find discrepancies.

Did dad leave a neat and tidy tax file as well as moaning about his fate?

The first step is to find his tax code at the date of death and then any other calculations of how it was arrived at.

Unfortunately pensioners get a special annual allowance but face a 30% rate of tax where it gets taken off them again because they have too much income to qualify, as a result their income tax can be in a mess of funny code numbers meant to reclaim previous year's under payments.

Fig out what you can, especially that benefits statement that includes the state pension at the start of the tax year.
When you can post specific numbers on here, someone will have a go at advising you what to do next.

Don't expect to get more than a hundred or two back, which is probably not enough to make the exercise worthwhile if you are paying a tax professional to do it for you.

jimmo

As John said, the R27 is a grubby little form but it serves a real purpose in the more straightforward cases.
Also, it is not uncommon for people to complain about the amount of tax they have to pay. This is particularly so for people who have been employed all their working life and, when they retire, suddenly have 2 significant sources of income for the first time. Those being a works pension and the state pension.
Without knowing your dad or his personal details, I would be inclined to take his moans about tax with a pinch of salt, but still take a look at his tax history, just in case.
However, even taking a look at his tax history requires a bit of basic tax knowledge and a bit of work. The less tax knowledge you have, the more work you will need to put in.
Coming back to the form R27, the best way I can describe it is that it is an informal Tax Return for the tax year of death.
First and foremost, if your dad was subject to Self Assessment (required to complete annual Tax Returns) there is very little point in you completing the R27 now because the Self Assessment Return will still have to be completed.
If your dad was not in Self Assessment then it would still be a good idea to complete the R27.
It requires a statement of the deceased's income from 6 April to the date of death.
That, certainly, does not require you to go digging into his history for the last 5 years, just the year of death.
Sorry to be blunt, but if your dad's tax affairs were relatively straightforward, it is very, very likely that a tax rebate is due for the year of his death and your sitting on the R27 is doing no good at all. In many ways you are guilty of the sort of procrastination that we are all fond of blaming on others.
Pull your finger out and get on with it or pay a professional to do it for you.
As a separate matter, your dad's moans about paying too much tax may, or may not have merit. You need to ask yourself whether you are the best person to sort this out.
It can be done and, to me, John_Pierpoint is himself, an outstanding example of an amateur taking on the system and winning (search for Mr Dog on this forum).
You, sitting on an R27 for more than a year, is not a good start but only you can decide whether it is worth the effort.

John_Pierpoint

Thanks for you kind words Jimmo.

In my case I failed to pick up on the mention of an alternative of completing a (6 month) self assessment instead of the R27.
So I filled in the R27. This was before I discovered that a combination of rising interest rates in 06 - 07 - 08 followed by a knee jerk reaction of increasing Mr Dog's "K" tax code, was making a mess of any attempt to get the Income Tax account back on a level keel.
A "K" tax code, I now know thanks to the help of posters on here, is a negative tax code BUT it can only increase the PAYE deduction to 50%, so Mr Dog was slowly sliding backwards in terms of catching up with his tax liabilities.

On the back of my envelope, I had calculated that the estate owed about £50 in unpaid tax; so when a mysterious £40 appeared in the executors account, I failed to realise it was a tax rebate. I never did get a statement explaining how the calculation had been done.

Meanwhile the self assessment system went into overdrive, fined me £100 pounds for missing the October deadline and kept on demanding payment on account plus interest, to cover the tax for a period of 6 months after Mr Dog had died. So I paid it, just to get a respite from the computer harassment.

During this time time I has managed to write 4 letters asking what was going on - I eventually got things sorted out after a day spent pressing "last number redial" followed by a two day wait for someone to phone me back with an explanation. The cherry on the cake was getting a "reply" to one of my 4 letters about 6 weeks later.

I did manage to get the £100 cancelled and eventually got back the money paid on account, plus some tax free interest.

So the message is that if dad was already in the self assessment system - stick with it.

Savvy_Sue

In the process of doing R27 for my dad too: shouldn't be too difficult because there only seem to be two regular sources of income for him, his state pension and his personal person.

However, what we didn't have was whatever the equivalent of a P60 is when someone's died, so we didn't know (without trawling the bank statements) what his income for the year to death had been.

His private pension has very swiftly sent what we needed: total paid via his pension, plus tax code in use at time of death. DWP is taking a little longer ...