Income Tax for late Mother help please

sparkiemalarkie

We have been told, by the solicitors, that £180+ income tax is owed on my late mothers income.
I want to dispute that but needed to check first that my calculations are correct.


Earnings from state pension for 2017/18
£8108
Income from Attendance Allowance 2017/18
£4108
Income from savings 2017/18
£2,200 (or there about)
Income from shares
£200 (or there about)


I believe that there is no income tax to pay am I right and is it worth making a fuss?


tia


x

p00hsticks

Without knowing your mothers tax code it's not possible to say....

Dazed_and_confused

If the op has posted all the income received in 2017:18 (and the estimated figures are pretty accurate) then she does not owe any tax for that particular tax year.

Attendance allowance is not taxable so the other income is within the standard Personal Allowance.

Even if she had applied for Marriage Allowance and the savings interest and dividends, which potentially take her income above the reduced Personal Allowance, would all be taxable at one of the 0% rates.

The op should ask the solicitor which tax year the underpayment actually relates to.

Or if they insist it's 2017:18 also them why Attendance Allowance is included.

I'm not sure solicitors are really personal tax experts.

sparkiemalarkie

I have just received the paperwork from the solicitor and it seems that the tax is payable on savings interest in the tax year following her death.
She died very close to the end of tax year 2017/18 and the savings have been in accounts making interest until a few weeks ago. The interest in the new tax year has been taxed at 22%
I guess that this is correct?


thanks


sparkie

Uxb

Ah - so rather than your late mothers income up to the date of death it is in fact income earned by the estate during its administration post death.

Estates do not get any personal allowance/nil band whatever so it is all taxed.
I thought that savings type income was taxed at 20% rather than 22% but I'll defer to the tax experts who will be along shortly.

BoGoF

It should be 20% but the tax will be due.

Cook_County

And the solicitor's fees for their time dealing with your questions will also increase the amount of money being spent out of the estate...

Dazed_and_confused

Definitely 20% not 22%.

sparkiemalarkie

Cook_County wrote: »

And the solicitor's fees for their time dealing with your questions will also increase the amount of money being spent out of the estate...

Oh, tell me about it!

I had completed 95% of the paperwork and the executor decided to give it to a solicitor.
8 months on and £5,000 in fees it's still not finished.
I doubt that it will be completed this year.


Mind you the solicitor was very complimentary about my figures and paperwork

Uxb

The provisions within the inheritance and dependencies act of 1975 mean that solicitors will be most unwilling to finally distribute the estate until 6 months after probate was granted has elapsed.
So that in general means that any executorship is likely to last around a year - which is indeed the rule of thumb when dealing with these things.

Solicitors will charge both on their time taken and a "value component" as a % of the estate related to the size of the estate to reflect the responsibilities etc of dealing with particularly high value estates.