Income Tax Return after death

dw3305

My mother died last month and I am an executor.  Her affairs were pretty simple, but she did own a house, rented out since she finished her days in a care home.  So I will need to complete a tax return for 2022/3.  I have all the information I need to do this and would like to get it sorted so I can move on to IHT and probate.  HMRC have been informed through Tell Us Once, and I can no longer access her online Self Assessment account, so they obviously know.  But all I can find on their website is that I have to complete a return if they ask me to.  Do I have to wait for them to contact me, or can I just register in some way to make a return online, or download a form?  My own calculation suggests she has overpaid by more than £1000.
I'm hoping some kind person can point me in the right direction and save me a long wait to speak to someone on the phone.  I've tried once and given up.

JGB1955

When I was in this situation I wrote HMRC a letter, setting out my father's income and tax paid for the year and asking for the rebate paid to me as executor.  It took several months to sort out.  You can apply for probate without having a final income tax figure.  My father was similarly owed a rebate of about £1.000 and that was the guestimate I used for the probate application.

Any income received by the estate after the date of death (e.g. from property rent, savings or investments) will also be subject to tax and you may need to submit a tax return for that in due course.  The estate will not have a 'personal allowance' and will be taxed in full at 20% starter rate.

Keep_pedalling

I would concentrate on the IHT return as IHT has to be payed within 6 months (or at least the first instalment). You will have to do two returns for this financial year one for her income up to the time of her death and one for the rental income coming into the estate after her death. If the tenant is not out by 5th April the estate will have a return for the following year as well. 

dw3305

Thank you both for your responses, which have clarified things.  I hadn't appreciated that I could simply put an estimate of the tax refund in, so I think I will put that on one side for now in the hope that HMRC will set the ball rolling.  I've now been through all the IHT forms and I'm feeling rather pleased with myself that I seem to have every single thing I need except the IHT reference number (applied for) and the invoice for the funeral (in the post).

Keep_pedalling

dw3305 said:

Thank you both for your responses, which have clarified things.  I hadn't appreciated that I could simply put an estimate of the tax refund in, so I think I will put that on one side for now in the hope that HMRC will set the ball rolling.  I've now been through all the IHT forms and I'm feeling rather pleased with myself that I seem to have every single thing I need except the IHT reference number (applied for) and the invoice for the funeral (in the post).

Well done!

dw3305

Can I revive this, please.
HMRC did indeed contact me and I completed my mother's 22/23 tax return in March, around the same time as the probate application went in.  Since then, nothing, but I was expecting a long delay.
However I still have to complete a 22/23 tax return for the estate.  Do I just wait for HMRC to ask for it?  I can't do it online, I'd rather not phone, and I don't know who to write to.

Notepad_Phil

dw3305 said:

Can I revive this, please.
HMRC did indeed contact me and I completed my mother's 22/23 tax return in March, around the same time as the probate application went in.  Since then, nothing, but I was expecting a long delay.
However I still have to complete a 22/23 tax return for the estate.  Do I just wait for HMRC to ask for it?  I can't do it online, I'd rather not phone, and I don't know who to write to.

Have you looked at https://www.gov.uk/probate-estate particularly https://www.gov.uk/probate-estate/reporting-the-estate ?

I'm guessing that as you only applied for probate in March then you're still in the administration period. If that is right then my reading of the text is that you don't do a tax return (and that's not always required) until after the administration period.

dw3305

Another update!

It took eighteen months for HMRC to finalise my mother's 2022/23 tax. I sent them four identical returns in this time, during which it took them an average six months to reply to any letter, but no time at all to issue penalty notices for supposedly not submitting a return. Finally they came to their senses, cancelled the penalties, and agreed that the estate was owed £1000 as I knew all along. They said they would pay that into the estate's bank account. And they didn't.

Around this time the house was sold. I wrote to HMRC telling them the amount of taxable income in the estate, and asking them to deduct the amount of the refund that was still outstanding. I heard nothing for six months until I received a letter acknowledging receipt of my letter, apologising, and telling me they would make the refund. And they did.

That was a year ago, and I've heard nothing since. The estate still owes them several thousand pounds (in my opinion). They have acknowledged receipt of the letter that tells them this. Is there any obligation on me to tell them again?

probate_slave

Sorry that HMRC have been giving you such a run-around. A one year delay is not uncommon for issuing an estate tax bill under "informal arrangements", ie for a simple estate. You could try the Deceased estates helpline (0300 123 1071, phone at 9am sharp Mon-Fri) in case they have details of your mother's estate and can accelerate the process.

I did wonder which department you have been corresponding with, since HMRC can be poor at communicating internally. If your correspondence has been with HMRC Self-assessment, then you would still need to send details of estate income to HMRC Bereavement services, as described in Notepad_Phil's link above. And be prepared to appeal any penalties which will likely come your way.