Help with Income tax taken from bank insurance policy refund

BoGoF

Keep_pedalling wrote: »

That depends on your other income. You are allowed to earn £1000 interest tax free, and you said that you earn under the tax threshold so you should be able to get at least a good portion of it back.

That all depends on who the income belongs to. Is it the OP's or that of the late mother's estste.

If the latter, no refund is due.

Keep_pedalling

BoGoF wrote: »

That all depends on who the income belongs to. Is it the OP's or that of the late mother's estste.

If the latter, no refund is due.

Interesting point, some of the interest would be to cover the period the OPs mother was still alive but the rest is to cover the loss to the OP over the last 2 years. The opening post says it was paid to the OP as the beneficiary of the estate rather than the executor, but it does seem a bit of a grey area.

dori2o

In this instance I think the best thing to do is send a copy of the correspondence, with a cover letter, asking for HMRC to confirm who the income belongs to as per current laws.

Explain in the letter that the payment is a refund of dual paid insurance premiums paid by your late mother, and that tax has been deducted from the interest given on the overpaid premium.

Ask HMRC to rule if this is your income as the beneficiary of the estate, in which case you will show it on your tax return and potentially receive some/all the tax back.

Or if the refund/interest falls within the admin period of the estate.

Whoever deals with the letter should refer it to a higher officer/inspector for a definitive decision.

Once you have the answer you can decide what action you need/want to take next.