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Inheritance and Tax Credits
Watermelon83
Posts: 5 Forumite
Hello,
In November 2017 I received a legacy payment from my Grandmothers Will Trust for just over £16k.
As I was receiving Working Tax Credits, I informed H M Revenue straight away.
They have since been giving me conflicting information.
I have had a letter requesting the Trustees complete an R185 form, and don't understand why they would want this as the money I received was a legacy amount and not residual income from the Estate.
A couple of weeks later I receive another letter from them saying that all I "need to include as other income is any taxable interest generated by your inheritance after disregarding the first £300".
Unfortunately the Trustees haven't helped matters as the R185 form they completed for H M Revenue they have added an extra digit on the form looking like I have had payment of a six digit figure instead of what I actually received. I actually think the legacy payment shouldn't even be put on this form because it is not residual income received and they should complete the form with zeros to try and get this readjusted as now H M Revenue have stopped all my tax credits due to the incorrect information on the form.
H M Revenue want an amended form but I really don't know how to proceed next.
I have spoken with CAB and they said a covering letter from the Trustee explaining their previous error and another signed R185 form showing all zeros would be the first course of action.
If anyone could help or assist or been in this position before, I would be grateful for comments as I really don't know where to turn next as no one seems to be able to know what to do when I speak to Tax Credits, Tax Office or Income Tax Department.
Thank you in advance.
In November 2017 I received a legacy payment from my Grandmothers Will Trust for just over £16k.
As I was receiving Working Tax Credits, I informed H M Revenue straight away.
They have since been giving me conflicting information.
I have had a letter requesting the Trustees complete an R185 form, and don't understand why they would want this as the money I received was a legacy amount and not residual income from the Estate.
A couple of weeks later I receive another letter from them saying that all I "need to include as other income is any taxable interest generated by your inheritance after disregarding the first £300".
Unfortunately the Trustees haven't helped matters as the R185 form they completed for H M Revenue they have added an extra digit on the form looking like I have had payment of a six digit figure instead of what I actually received. I actually think the legacy payment shouldn't even be put on this form because it is not residual income received and they should complete the form with zeros to try and get this readjusted as now H M Revenue have stopped all my tax credits due to the incorrect information on the form.
H M Revenue want an amended form but I really don't know how to proceed next.
I have spoken with CAB and they said a covering letter from the Trustee explaining their previous error and another signed R185 form showing all zeros would be the first course of action.
If anyone could help or assist or been in this position before, I would be grateful for comments as I really don't know where to turn next as no one seems to be able to know what to do when I speak to Tax Credits, Tax Office or Income Tax Department.
Thank you in advance.
0
Comments
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First of all, the Trustees should advise you on what tax treatment applies to the distribution they have made.
http://www.gabelletax.com/wp-content/uploads/2012/07/tj1136bramallduttatrusts.pdf
If they don't know, they should check with an accountant expert in the taxation of trusts.0
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