Income and dividend taxation on estate

Couple of quick questions please for esteemed forumites.

My late father had a couple of accumulated fund share products where dividend income was reallocated back into the fund. My understanding is that the reallocated dividend income is nonetheless liable for dividend tax, the product not being an ISA or a SIPP. My question here is two fold: does my late father's personal allowance terminate on date of death or at the end of the tax year of the date of death? My research seems to suggest the former but I did read somewhere that the allowances remained in place for the rest of the tax year. Also given the dividend reallocation, how do I determine the capital gain/loss from DoD? The overall investment has gone down from DoD but the loss is much larger if I take into account the dividend reallocation.

The other question is who is liable for any further income tax once a deceased's accounts have been closed following grant of probate but before the money has been distributed from the estate account into the beneficiaries?


  • jlfrs01
    jlfrs01 Forumite Posts: 137
    Fourth Anniversary 100 Posts Name Dropper
    There's a flat rate of 7.5% tax against Dividends the Estate will need to take into account.

    The answer to your 2nd question is twofold. The Estate is liable for any tax or debts and but it is the Executors who are personally liable which is why it is a very good idea to get a firm grip on all liabilities before the Estate Accounts are signed off and assets distributed. In this respect, keeping a sensible amount in reserve to allow for any post-disbursement debts or claims could be considered because it may not be possible to recover monies paid out to beneficiaries should a debtor subsequently come forward. HMRC and the DWP are notoriously slow (based on my personal experience), so it's something to consider.
  • Bolt1234
    Bolt1234 Forumite Posts: 226
    100 Posts Third Anniversary
    Following on from this..  Got Grant of Probabte early July but my late Father had Triple Point Business Relief Shares along with various other Hargreaves Landsdown shares. We have just done the last tax return for Father and didnt include these.  

    Is profit worked out between date of passing or date the shares are sold or something else.  I am the sole Executor and have a solicitor advising me but they havent mentioned this.  I have plenty of headroom to pay out on any tax owing.

    Could someone help please.  Accountant doing the tax return didnt mention either although they know he has passed away
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