Suggestions on managing tax for elderly mother?

My recently widowed mother currently has capacity, but would rather leave me to take care of most of her financial affairs.

Her husband had a tax adviser who was filing their returns for them for most of their lives. He's now retiring (but has done their 22/23 returns), so I'm going to take over her stuff.

How would you suggest I manage this? Her affairs come down to:
  1. State pension
  2. Widow's pension (husband was a civil servant)
  3. A small annuity with Aviva
  4. A savings account
  5. A stock & shares trading account (almost certainly won't be selling in the foreseeable)
  6. A fixed rate cash bond maturing next year
  7. Some regular charity payments
  8. A rental property
  9. No debts or other liabilities
I'm assuming a spreadsheet where I can record various events (P60's, donations, rent and repairs etc.). But does anyone have any tips (or even a sheet they can show me)?

Thanks!

PS: She's sent a certified copy of her PoA to HMRC with a covering letter ask for me to deal with her tax. That was about 6 weeks ago. No acknowledgement of course, and not expecting anything from them until at least next year :-) The banks and other organisations have my PoA registered already though.


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  • lr1277
    lr1277 Posts: 1,617
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    edited 20 September 2023 at 12:43PM
    My mum was widowed last year. We are getting an accountant to submit dad's tax returns for 21/22, 22/23 and obtain probate.
    I help my mum do her tax returns.
    We use taxcalc as dad used it for many years. I used to use taxcalc for my retuns till there were complexities at which point I started using an accountant.
    I know from an MSE point of view I (or my mum) shouldn't be paying for taxcalc as your can use the free service on the HMRC website, but I am comfortable with taxcalc so continue to use it.
    Don't forget about dividends in the trading account. Parents' stockbroker makes available a sheet with all income gained in the account. If your mum's case if it was a joint account, the shares and any dividends become hers alone on your dad's passing. As an aside I am waiting to find out from the accountant what happens to dividends in my dad's S&S  ISA now that he has passed. Are those dividend's taxable? And until we get probate, the stockbroker won't transfer dad's ISA to my mum.
    Regarding savings interest, how good is your mum at keeping statements etc? In my mum's case she says she wasn't always sent a statement nor an end of year tax certificate. So the workaround is to go to bank statements and work out the income from their statements. Beware, not all banks allow you to see statements going back 2 years which may be needed if you are completing the tax return in January 2024 for income that was gained in April 2022. I'd suggest you start compling/collecting all relevant statements (paper or electronic format) associated with the tax years for which you are submitting a return.
    Yes I use a spreadsheet to record the various incomes/costs. This can be useful as if you don't have end of year tax certificates and need to add up the monthly figures, the spreadsheet will do this for you.
    I think if you are submitting your own return and not using a 3rd party (like a tax advisor), either you or the tax advisor has to tell HMRC that the tax advisor is no longer representing your mum. There might be a form to submit. Your tax advisor can advise. Also if you choose to use another 3rd party to submit the retun, then they will have to be registered with HMRC.
    If you are going to submit your mum's return, make sure you have things like the tax ID (UID) and the government gateway ID. I can't remember what else. If your mum doesn't have these, at least you have enough time to get the relevant ID's required for a tax submission. If memory serves these normally come through in a week or 2, but don't hold me to that. One of the advantages of taxcalc (for me) is that you only have to enter these ID's once and they are available on all subsequent returns where you use taxcalc. Or you could simply record these ID's somewhere convenient and use them each year.
    HTH.

    Edited to add: the are various types of dividend income for example dividends from stocks, dividends from unit tusts, foreign income et al. This is where the sheet from the stockbroker was useful as it split ou the various different types of income as required on the tax return.
    Also in terms of the rental income have a look at the previous tax returns submitted by the tax advisor. so you get a handle on income and more importantly allowable expenses.

    2nd edit: certain funds (accumulation funds) don't pay dvidends but give you either more shares in the fund or more units in the fund. These need to be declared as income. Suggest you get advice from the tax advisor if this is applicable to your mum. Or pehaps if this is the case, your mum's stockbroker might be able to help you with this information.
  • The most difficult to keep track on are the rental property and charity gifts ( especially if this includes one off gifts) and I would keep a separate a separate SS for each. The pension income should appear automatically on the on line return. 

    To simplify things I would also try to get as much of the assets in the trading account into a S&Ss ISA.
  • sheramber
    sheramber Posts: 18,633
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    You should be able to see on her personal tax account if the POA has been noted.
  • OK good so that confirms roughly what I'd imagined - and some good tips there along the way!  Thanks all!

    Her S&S trading (that is, non-ISA) account is in a Vanguard Lifestrategy accumulator. So can I assume I can ignore that unless she sell any (so CGT basically)?
  • waveyjane said:
    OK good so that confirms roughly what I'd imagined - and some good tips there along the way!  Thanks all!

    Her S&S trading (that is, non-ISA) account is in a Vanguard Lifestrategy accumulator. So can I assume I can ignore that unless she sell any (so CGT basically)?
    No, you can’t ignore it as the dividends added are still taxable, which is why it is better to move as much as you can into an ISA although you have to be careful not to exceed her CGT allowance while doing so.
  • waveyjane
    waveyjane Posts: 248
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    edited 20 September 2023 at 2:11PM
    waveyjane said:
    OK good so that confirms roughly what I'd imagined - and some good tips there along the way!  Thanks all!

    Her S&S trading (that is, non-ISA) account is in a Vanguard Lifestrategy accumulator. So can I assume I can ignore that unless she sell any (so CGT basically)?
    No, you can’t ignore it as the dividends added are still taxable, which is why it is better to move as much as you can into an ISA although you have to be careful not to exceed her CGT allowance while doing so.
    I can't see where Vanguard detail the dividends received inside the fund though. Are you sure?

    EDIT: Actually, seems they quote a per share amount for the year. But in my mother's case she's not got enough units to get over the tax free amount I think.



  • If it’s less than £2000 it will be tax free but it still needs to be declared on her SA. You should be able to download an annual tax statement from Vanguard with the relevant info on it. 
  • Just a footnote on this in case anyone's reading:

    https://techzone.abrdn.com/public/investment/Guide-Taxation-of-Collectives

    "There is no adjustment for ‘equalisation payments’ on the notional distributions from accumulation shares. That’s because the capital has not been returned to the investor and therefore does not alter the acquisition cost."

    So this means I can ignore her Vanguard Lifestrategy accumulation fund (in a non-sheltered account) for tax returns, unless of course she sells any.
  • Linton
    Linton Posts: 17,024
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    waveyjane said:
    Just a footnote on this in case anyone's reading:

    https://techzone.abrdn.com/public/investment/Guide-Taxation-of-Collectives

    "There is no adjustment for ‘equalisation payments’ on the notional distributions from accumulation shares. That’s because the capital has not been returned to the investor and therefore does not alter the acquisition cost."

    So this means I can ignore her Vanguard Lifestrategy accumulation fund (in a non-sheltered account) for tax returns, unless of course she sells any.
    “No adjustment for equalisation payments” has no bearing on whether you can ignore  an ACC fund. Equalisation payments are a complication  only affecting it he first ever dividend received (or regarded as having been received) after buying an investment.
  • waveyjane said:
    Just a footnote on this in case anyone's reading:

    https://techzone.abrdn.com/public/investment/Guide-Taxation-of-Collectives

    "There is no adjustment for ‘equalisation payments’ on the notional distributions from accumulation shares. That’s because the capital has not been returned to the investor and therefore does not alter the acquisition cost."

    So this means I can ignore her Vanguard Lifestrategy accumulation fund (in a non-sheltered account) for tax returns, unless of course she sells any.
    I don’t think so, you need to understand what is classed as an equalisation payment. 

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