R27 tax form - advice please

lucky77

I am trying to complete form R27 received from HMRC. It appears that I only declare income up to the date of my mother's death and ignore any interest paid on her savings accounts at a later date such as on closure. Is this correct?

What is the position regarding interest and tax paid after death? My brother and I are the sole beneficiaries of my mother's estate. A couple of her accounts will remain open to maturity in November 2013 and October 2016.
I complete a tax form each year to reclaim some of the tax paid on my savings and my brother has been made redundant so pays little or no tax at present. Do I declare the interest earned between death and closure of the accounts on my tax form as I am the administrator of the estate or do my brother and I declare half each or do we ignore it? And what about the accounts that are still open? Any advice would be greatfully received. Interest in all cases is paid after tax so HMRC will not be losing out if it is not declared but I don't want to be penalised in the future for not doing the right thing - whatever that is!
(If this is not the correct forum for the question, can someone please direct me to the right one).

jpow112

Interest up to death - R27

Interest after death, to the estate, on the IHT forms. Should not appear on your own personal tax return.

as far as I know...

Tuesday_Tenor

Some time since I did a R27, so can't answer. I think you should double-check with HMRC.

I assume you are (one of) the executor(s)?
You need to separate your positions as executor and beneficiary in your head. As executor you are responsible for ensuring (i) income tax has been sorted out (paid/refunded as necessary, as you're doing with R27) and (ii) inheritance tax liability is properly assessed and, if necessary, IHT paid. As beneficiary, you will eventually inherit a sum of money which is not in itself taxable or needs to figure on your tax form. Once it is yours, any interest received from that date onwards is part of your own tax picture, of course.

>>> A couple of her accounts will remain open to maturity in November 2013 and October 2016.
No, you need to realise these assets into her 'Estate'. Which is usually held in a separate 'Executors Account' until ready for distribution after all debts etc, paid. You notify the banks of her death and they will close the accounts and transfer to Executors Account. Death is one reason for closing accounts which would otherwise run to a fixed date.

getmore4less

R27 up to DOD

You will need to do estate tax returns for the duration of administration on for each tax year.
( I did this as a single letter itemising the income/tax fo 2 tax years)

There is also complications with 40% taxpayers that are benifitiaries.

JohnP know much more about this than I ever hope I need to.

lucky77

Thank you for your replies. I have already completed the IHT forms - no inheritance tax is payable.
I have closed most of the bank/building society accounts, paid them into an account used solely for probate purposes and paid out 50% of each to my brother as and when the funds have cleared. All bills have been paid. Some banks said accounts had to be closed on death but Britannia and Birmingham Midshires said the fixed rate bonds could run to maturity and as the rate was better than currently available I opted to let them continue and will pay half to my brother on maturity. I guess this means probate won't technically be complete until then, does this matter? My brother is happy for the accounts to continue as he will benefit from the higher rate of interest.

What is an estate tax return? Is this where I need to declare interest received and tax paid on accounts between date of death and closure of the account? Do HMRC request this information after the R27 form has been submitted? There are no beneficiaries who pay 40% tax.

ValHaller

Tuesday_Tenor wrote: »

>>> A couple of her accounts will remain open to maturity in November 2013 and October 2016.
No, you need to realise these assets into her 'Estate'. Which is usually held in a separate 'Executors Account' until ready for distribution after all debts etc, paid. You notify the banks of her death and they will close the accounts and transfer to Executors Account. Death is one reason for closing accounts which would otherwise run to a fixed date.

Can you give a reason why this MUST be so? AFAICS the money is not required to settle debts, the beneficiaries are content and the bank with whom the bonds are held is content too. So what is there to force cashing in the bonds?

getmore4less

Premium bonds are valid for 1 year from DOD so don't need to be cashed in.

Don't see why any investments needs to be liquidated untill needed.

Adds to the administration if they can't be transfered to a new owner.

Tuesday_Tenor

ValHaller wrote: »

Can you give a reason why this MUST be so? AFAICS the money is not required to settle debts, the beneficiaries are content and the bank with whom the bonds are held is content too. So what is there to force cashing in the bonds?

No, Lucky77 has explained that continuing to maturity is both possible and opted for in this case.

My apologies, it was a situtation I hadn't come across before.