How to Classify Income

HappyScotsman

I'm hoping an answer here will save me bouncing around HMRC helplines ....

Mother died Feb, filled in and submitted her SA Apr 20 - Feb 21 suspecting the answer would be zero. Had notification today that there was a £50 tax refund due.

Now arguing myself in circles about how to classify the income; do I add it to Box 76 of IHT400 Other Income and that's an end to it, or do I class it as Estate income for FY21-22? My gut feeling is the former, but having been told by a pension fund that their final payment should be regarded as 21-22 income since it arrived in May, I'm a little thrown.

Marcon

If it was income due to your mother at the date of her death, then Boxes 76 it is: https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm10110

I'd be tempted to ask the pension fund why it took them so long to make the final payment of her pension - normally the problem is overpayment, because they have frequently paid the final month's instalment before they know of the death.

buddy9

From IHTM 

Box 74 of the IHT400 should include any Income Tax or Capital Gains Tax actually repaid to the estate or a reasonable estimate of any repayment that might be due to the deceased.

HappyScotsman

buddy9 said:

From IHTM 

Box 74 of the IHT400 should include any Income Tax or Capital Gains Tax actually repaid to the estate or a reasonable estimate of any repayment that might be due to the deceased.

Absolutely spot on - going word blind filling in forms.