HMRC Bank Interest returns: A mess?

sheramber

Are you saying that the executor account received interest and the estate paid tax on the interest.

As beneficiary of the estate  you received the net interest amount.

You are now claiming the tax  paid by the estate on the interest it received.

You did not receive the interest amount directly but as part of the estate distribution.

TheSpectator

SnowMan said:

Dazed_and_C0nfused said:

I suspect that the inclusion of taxed interest may have meant you were caught by this new process HMRC have implemented?

https://www.litrg.org.uk/news/ppi-tax-refunds-new-evidence-requirement

Thanks.

I can understand that an attempt to reclaim net interest would be a potential risk factor for HMRC, as I could have just claimed I'd received net interest from an estate distribution, when I hadn't, and they have no way of cross referencing my claim to the estate payment of tax as that doesn't identify the beneficiaries. At least they should be able to tie mine in now as I sent them a copy of their own letter about the estate tax due and explained how it all was connected.

The wording they used was some waffle about since 2016 bank savings interest has been paid gross so we don't think you have net interest. Perhaps that's a paragraph they use regardless of the source of the net interest, or perhaps they just picked the wrong paragraph to 'paste in'.    

If you declared the R185 income in section 3 of the R40 then you were wrong to do so. It should have went in boxed 4.6 and 4.7.

SnowMan

TheSpectator said 

If you declared the R185 income in section 3 of the R40 then you were wrong to do so. It should have went in boxed 4.6 and 4.7.

I didn't put the R185 net interest and tax deducted in section 3 of the R40. As I mentioned earlier I put it in the trust, settlement and estate income section of the R40 specifically boxes 4.6 and 4.7 which is where the R185 tells you to put it.

I put the gross interest from my own savings accounts in section 3.

SnowMan

sheramber said:

Are you saying that the executor account received interest and the estate paid tax on the interest.

As beneficiary of the estate  you received the net interest amount.

You are now claiming the tax  paid by the estate on the interest it received.

You did not receive the interest amount directly but as part of the estate distribution.

Yes that's right. The process is explained here.

The estate administration period interest included the executor account interest (there were other savings accounts in the estate that paid interest too). 

And the estate paid 20% tax on that estate administration period interest to HMRC by bank transfer. 

And it was just my share of the net estate administration period interest that formed part of the estate distribution paid to me, on which I am reclaiming the tax paid. It's reclaimable because, amongst other things, my savings interest (including the grossed up R185 interest) was below £1,000.