HMRC form R185

Anthear

Hi - does anyone know if this form is ONLY to be used for informing beneficiaries when bank account interest, for example, has had tax taken off? I know it is also to be used when letting beneficiaries know about dividend income, but I am confused if it is only to be used when payments are made net and NOT gross of tax.

Can anyone clarify?

many thanks

MichelleUK

Is there a reason that the estate did not declare the income and pay tax on it or would the tax liability have been less than £100?

Anthear

The estate DID pay tax on interest in the 2015/16 tax year, in the 2016/17 year interest was paid gross and not detailed on the R185 form.


My question is, is the form ONLY for occasions where tax has been paid at source? It would be REALLY helpful if ALL the interest paid was communicated to beneficiaries in one hit, on one form. As it is, I have it in several different places which is difficult to deal with. Hence the question.....

MichelleUK

The reason that I asked, was that the estate should declare the untaxed interest to HMRC (either on the estate tax return or informally), then pay the tax, then enter the amounts on the R185.

It appears that you may have missed a step.... the bit where the estate pays over the tax on the income! The estate did not have to do it in the past, as it had already been paid. Now, the estate must pay the 20% directly to HMRC.

The £100 I mentioned was because there are some temporary allowances that HMRC have made due to the way that interest is paid (see reporting requirements):

https://www.gov.uk/government/publications/hm-revenue-and-customs-trusts-and-estates-newsletters/hmrc-trusts-and-estates-newsletter-april-2017#administration-period

So, to answer your question, there is no box for interest that has not been taxed on the R185, as it should be taxed by the time that it is passed on to the beneficiaries!