Treatment of accrued savings interest at date of death

monkeyspanner

I am currently preparing figures for a probate application.

On a number of savings accounts the banks have quoted a balance at date of death plus a figure for the accrued but unpaid interest, this interest being quoted net of basic rate tax.

I have a couple of questions.
1. Does this accrued interest form part of the value of the asset which should be included in the probate figures, and should the gross or net figure be used.
2. Should this accrued interest be included in the deceased tax return for the year in which they died?

dzug1

1. Yes - net (I think)

2.Yes

John_Pierpoint

monkeyspanner wrote: »

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On a number of savings accounts the banks have quoted a balance at date of death plus a figure for the accrued but unpaid interest, this interest being quoted net of basic rate tax.

Are you sure this is a net figure, as my experience (back in 2008) where I was paying IHT and had a beneficiary paying 40% tax, was that the figure was gross.

But as interest rates were changing rapidly then I could have been wrong.

There are special arrangements for tax payers who are looking at paying 40% IHT and 40% income tax on their marginal income, but not for those of us paying 20% income tax.

John_Pierpoint

HMRC try to explain TSEM6952
http://www.hmrc.gov.uk/MANUALS/tsemmanual/Index.htm
http://www.hmrc.gov.uk/MANUALS/tsemmanual/TSEM6052.htm
Its the law innit !.