Dying while owing tax

t8769

What happens if someone dies while oweing income tax?

Will the Inland revenue come after the estate of the deceased, or will it be forgotten?


Thank you

p00hsticks

I imagine that it;s like all other debts, in that it would need to be paid from the deceased's estate if there is money to do so.

I don't see why it would be written off unless the estate has absolutely no assets to pay the owed tax.

As executor for my later brother's estate, I recieved an automatic refund from HMRC for overpaid tax once they were aware he had died, as he died part way throguh the year and was still working up until his death and on the PAYE system.

olgadapolga

My uncle's estate paid tax, so yes, HMRC will take any tax owed, assuming that there's enough to cover the amount owed.

Jeremy535897

Any income tax owing by the deceased is a debt of the estate and needs to be paid, income tax included. The executors will also need to complete a tax return for the deceased for the year of death, and if there is any income arising to the estate, they will need to pay tax on that.

Keep_pedalling

For anyone administering an estate the order in which the assets need to be allocated are as follows.

Secured debt
Funeral costs
IHT for larger estates
Unsecured debt (which will include IT)
Beneficiaries.

if the estate does not have enough assets to meet the unsecured debt then it is insolvent and the unsecured creditors should get a portion of the debt back on a pro rata basis. Death does not wipe out the debt unless there is nothing in the estate to pay the creditors, debts can’t be inherited.

t8769

Thanks for the information!