PPI Tax for the Deceased

Dazed_and_confused

The tax code 1189L was correct.

Estimated earnings are a key element of how tax codes are calculated and on earnings of £11,191 tax code 1189L would mean no tax was deducted.

The interest entry was due to you having unused allowances.

If your estimated earnings had been £11,910 or greater then the interest wouldn't have appeared as there would be no spare allowances, the interest all being liable to tax at one of the 0% rates (assuming you didn't approach £150k income ).

I don't know why HMRC didn't explain this to you

Not worth changing it back to the correct position for such a small amount I guess but at least you know why the code was 1189L.

Lockardian

“Liable for tax at the 0% rate” - bloomin’ ‘eck, that’s confusing. I kinda get what you’re saying though but it hurts my head to try and understand it properly.

If only they had explained this other than “you have to pay tax coz you’ve used up your £1000 allowance on PPI interest”, and not having any knowledge of the potential £5000 starter rate.

jmcdonagh

Can my father claim tax back on my deceased mothers PPi payout. She received money back from two separate PPi claims in 2018 and died in 2019 she was 79 and a non taxpayer. 

Dazed_and_C0nfused

If the payments were made before she died then yes there might be some or all tax to claim back.

He either needs to complete an R40 (or two if one payment was in 2017:18 and one in 2018:19) on her behalf or if he no longer has the information to complete the other parts of that then he could try writing to HMRC with details of the statutory interest/compensation and tax deducted.

How old is your father?  Is it possible that he could benefit by the executor (you/him?) making a claim for Marriage Allowance?

jmcdonagh

Yes payments were made to her before she died. One claim was awarded sept 2018 and the other awarded jan 2019. Is the R40 form quite straight forward to fill in? Would I be able to do this online on his behalf. He is not able to do this himself also not able to write letters himself and has difficulty using the telephone. He has the award letters which show what she was charged in tax. He is 79 

Dazed_and_C0nfused

I think it has to be signed by the executor of her estate.  Not sure this is something that can be done online, probably best to print and post the form.

If he pays tax it night be worth looking at Marriage Allowance as it might save him a few hundred in tax for the 2016:17, 2017:18 and 2018:19 tax years (assuming her income was at a similar low level in those tax years).

jmcdonagh

Thank you I will print forms and he can sign them. Is there a dead line to reclaim this. As he and myself are in 12 week isolation at the moment 

Dazed_and_C0nfused

2015:16 tax year is over for tax claims on 5 April 2020 so you have a year or three for 2018:19   

jmcdonagh

Looking through R40 form it asks for state pension amount my deceased mother were entitled to receive for the year. My Father does not know this. She was just getting a weekly state pension  can he put a cover note in saying this. She also  left no assets on death and had no savings so is rest of form left blank or should we state this in cover note.