Discharged bankruptcy and tax rebate.

lottieholder

I'm asking this on behalf of my son. He declared himself bankrupt whilst serving a 4 year prison sentence. It was the only way he could stop his ex (who he had given legal ability to deal with his affairs) taking out contracts in his name and putting him in serious debt.

He was discharged last July, before his release. He started work the day after his release and has worked ever since including a considerable amount of overtime.

Last week he received a letter from HMRC stating that he was due £720 tax rebate. He contacted them to find out when he would receive this and was told he wouldn't as he'd been bankrupt.

Does anyone on here understand this as I have researched the Internet for quite some time including this site and I can't find the answer.

As he is trying very hard to get back to normal, including finding somewhere to live that isn't with myself or his father, the money would be very useful at the moment.

tigerfeet2006

If the tax rebate covers a time from before or durng his BR then it is an asset in his BR and belongs to the OR. If it is from after his discharge then I believe it will come to him.

Hopefully someone else will confirm this.

lottieholder

It can't come from during or before his BR as his only income was what he earned in prison which isn't enough to incur Income Tax. For the same reason he could not have had an IPA.

TheGardener

I think tigerfeet is right - if this is a rebate from tax paid on earning since he was discharged then the person who told him he couldn't have the refund may have been mistaken. I would go back to HMRC and challenge what you have been told, they may have misunderstood the conversation and though your son was saying he was currently BR? He needs to be clear about his discharge date and the date of the earnings.
...He also needs to make sure he has the right tax code so this doesn't happen again