H M Revenue,Inheritance, R185 and Tax Credits

830920

Hi I received inheritance in the sum of just over 16k.
I informed H M Revenue as I currently received working tax credits. H M Revenue have asked me to provide a R185 form from the Executors. They have provided me with this but they have put zeros on the form. Is this correct ?? It doesn’t look right. Am I right that the figure in this form should be any interest accrued on my share of the inheritance from the date of death to when I received it ? If so, if the interest was below £300, the form would be correct as I disregard the first £300.

Forgive my ignorance I have no idea, the lay executors have completed the form wrong once before and put a six figure sum in which has now cancelled my claim totally and I’m just really wary of sending yet another incorrect form in.

Surely as executors it’s their responsibility to give me correct information especially as their mistakes are now costing me.

I know you may need further information to be able to answer but something doesn’t feel right or maybe I am worrying too much.

The lay executors have told me that they are “too busy” to take advice so I am even more concerned. Not sure where to turn to next :-(

Any help would be so appreciated

Thank you

xylophone

Is this just a legacy or is it a distribution from a Trust?

R185 relates to distributions from a Trust.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/603922/R185_Trust_Income___final.pdf

830920

Thank you for your reply, I believe it’s a legacy and not from a Trust. The executors have said that it was from my nanny’s savings and then divided up between the 5 grandchildren. I’m sorry it’s so vague, I myself have limited information to go on, as Executors seem to be dealing with the Estate themselves. If an R185 doesn’t relate why would Revenue request this from me ? Even they are extremely unhelpful on the telephone each time I speak to them. It hasn’t helped that the first R185 form I sent in completed by the executors they put I had a six figure sum (I believe the comma between the 5 figures looked like a 1 to the Revenue) hence them stopping my claim. I really want to get this sorted ASAP as my working tax, child benefit has all been stopped due the incorrect figures from the last attempt of them completing the form.

When I spoke to CAB they said get the executors to do a covering letter explaining their error and resubmit the form with no figures but I’m really not 100% on this - any help if you can with limited info would be great I’m in a real state with all this.

I’m not sure whether to instruct solicitors or an accountant to help me even though the executors have a duty of care to do things properly :-/

830920

There is also an R185 form relating to income from an Estate too ....

xylophone

https://forums.moneysavingexpert.com/discussion/comment/73921858#Comment_73921858

This seems remarkably similar to post in above thread.

In November 2017 I received a legacy payment from my Grandmothers Will Trust for just over £16k.





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.

You are saying that there was no Will Trust from which income was paid to beneficiaries?

The executors were simply paying out the legacies?


The R185 (Estates) below

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/603950/R185_Estate_Income__03_17.pdf

Personal representatives (who can be either executors or administrators) may use this form to advise beneficiaries about income from the residue (see note below) of the estate of a deceased person for each year during the administration of the estate if a sum (see note below) is paid to the beneficiary in that year and for the year in which the administration of the estate is completed.........


The residue is what's left in the estate after you have paid all debts, legacies and taxes.

If you have simply received a legacy from a Will, then neither R185 (Trust) nor R185 (Estate) seems appropriate.

When the Executors paid you the legacy, (presumably a cheque drawn on the Executors' Account) was there an accompanying letter on the lines of

Dear X,

A cheque for £...... ( a legacy from the Estate of .....(dec'd) is enclosed.

Please sign and return the accompanying acknowledgement of receipt

Is the case that you have not received any income from the residue?

xylophone

https://www.litrg.org.uk/tax-guides/bereavement-and-tax/how-estate-taxed-during-administration

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem7262

the executors have a duty of care to do things properly

Yes, this is certainly the case.

The lay executors have told me that they are too busy to take advice

This won't wash.

http://www.lawpack.co.uk/wills/articles/article1582.asp

In the thread cited in post 5 above, there is this

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".

Does this actually mean interest arising on your legacy after you had paid it into your bank/building society?

SBFMAN

I am currently sorting out a relative's estate. They died in Aug 2018. The estate was finally distributed in its entirety in August 2019. We have filed tax returns for the years ended 05 April 2019 and 2020 whilst the estate was under administration. Question : Should be be raising a single set of R185 forms for the income that has arisen from Aug 2018 to Aug 2019, or should we be doing R185 forms for both years ended 05 April 2019 and 05 April 2020 ??

calcotti

SBFMAN said:

I am currently sorting out a relative's estate. They died in Aug 2018. The estate was finally distributed in its entirety in August 2019. We have filed tax returns for the years ended 05 April 2019 and 2020 whilst the estate was under administration. Question : Should be be raising a single set of R185 forms for the income that has arisen from Aug 2018 to Aug 2019, or should we be doing R185 forms for both years ended 05 April 2019 and 05 April 2020 ??

This is the welfare benefits forum. Your question is to do with tax rather than welfare benefits. Suggest posting on the Cutting Tax forum.