Seeing if tax is owed on estate? NOT IHT

wilkko73

My mum's estate is an excepted estate in terms of IHT but what about taxes that appear after death such as from Isa's mum has about £22k in of of those I need to close that down tomorrow when I get the paperwork to take to bank ,she only died a couple of weeks ago and I haven't got round to it.Will a tax demand appear from HMRC shortly after shutting it?Also what about monies received from pensions while alive with those pensions the tax is paid as you go along I hope.What is the best way to sort these things out?Do you write to HMRC or do they just send a bill? I have used Tell us once the day I got the death certificate

p00hsticks

HMRC will be aware of the death via the Tell Us once service and should sort out what the estate owes or is owed in the same way they would have done if your mother was still alive, but contacting the person named on the Tell Us Once form.

But it may take a while so don't hold your breath. I've just received a small tax refund for my late father, who died in March last year, as HMRC have finally gone through all his taxable income and tax paid during the tax year 2023-24. 

If your mother was in receipt of a private pension paid using PAYE then its likely the estate will get a tax refund to cover the months allowances after she died....

Keep_pedalling

If she was receiving income from a company pension, income tax would have been paid by the pension company. 

The ISA won’t attract any income tax until you close it down. 

wilkko73

p00hsticks said:

HMRC will be aware of the death via the Tell Us once service and should sort out what the estate owes or is owed in the same way they would have done if your mother was still alive, but contacting the person named on the Tell Us Once form.

But it may take a while so don't hold your breath. I've just received a small tax refund for my late father, who died in March last year, as HMRC have finally gone through all his taxable income and tax paid during the tax year 2023-24. 

If your mother was in receipt of a private pension paid using PAYE then its likely the estate will get a tax refund to cover the months allowances after she died....

Thank you.

wilkko73

Keep_pedalling said:

If she was receiving income from a company pension, income tax would have been paid by the pension company. 

The ISA won’t attract any income tax until you close it down. 

Hi Thank you so when the isa is closed will I need to do anything or will HMRC get in touch at some time,would it attract much payable income tax after closing down?,mum had 2 very small company pensions I did stop those over the phone,is it best to write to them and ask for final accounts? or that may well be what's going to happen after the phone conversation last week

poseidon1

wilkko73 said:

My mum's estate is an excepted estate in terms of IHT but what about taxes that appear after death such as from Isa's mum has about £22k in of of those I need to close that down tomorrow when I get the paperwork to take to bank ,she only died a couple of weeks ago and I haven't got round to it.Will a tax demand appear from HMRC shortly after shutting it?Also what about monies received from pensions while alive with those pensions the tax is paid as you go along I hope.What is the best way to sort these things out?Do you write to HMRC or do they just send a bill? I have used Tell us once the day I got the death certificate

With regard to the isa, HMRC permits it to continue to generate tax free income and/or gains for up to 3 years after death or the end of the estate administration,  whichever is sooner. Therefore unless these funds will be needed quickly to pay estate liabilities you may wish to take advantage of  this concession for as long as it is feasible in the circumstances.

Dazed_and_C0nfused

wilkko73 said:

Keep_pedalling said:

If she was receiving income from a company pension, income tax would have been paid by the pension company. 

The ISA won’t attract any income tax until you close it down. 

Hi Thank you so when the isa is closed will I need to do anything or will HMRC get in touch at some time,would it attract much payable income tax after closing down?,mum had 2 very small company pensions I did stop those over the phone,is it best to write to them and ask for final accounts? or that may well be what's going to happen after the phone conversation last week

I think what @Keep_pedalling meant is there is no tax to pay on an ISA.

But if the ISA is closed and funds moved to a non ISA account then there might be tax to pay by someone on the interest received from the non ISA account.

wilkko73

poseidon1 said:

wilkko73 said:

My mum's estate is an excepted estate in terms of IHT but what about taxes that appear after death such as from Isa's mum has about £22k in of of those I need to close that down tomorrow when I get the paperwork to take to bank ,she only died a couple of weeks ago and I haven't got round to it.Will a tax demand appear from HMRC shortly after shutting it?Also what about monies received from pensions while alive with those pensions the tax is paid as you go along I hope.What is the best way to sort these things out?Do you write to HMRC or do they just send a bill? I have used Tell us once the day I got the death certificate

With regard to the isa, HMRC permits it to continue to generate tax free income and/or gains for up to 3 years after death or the end of the estate administration,  whichever is sooner. Therefore unless these funds will be needed quickly to pay estate liabilities you may wish to take advantage of  this concession for as long as it is feasible in the circumstances.

Hi thank you,sadly I need the funds to pay towards a small care bill

wilkko73

Dazed_and_C0nfused said:

wilkko73 said:

Keep_pedalling said:

If she was receiving income from a company pension, income tax would have been paid by the pension company. 

The ISA won’t attract any income tax until you close it down. 

Hi Thank you so when the isa is closed will I need to do anything or will HMRC get in touch at some time,would it attract much payable income tax after closing down?,mum had 2 very small company pensions I did stop those over the phone,is it best to write to them and ask for final accounts? or that may well be what's going to happen after the phone conversation last week

I think what @Keep_pedalling meant is there is no tax to pay on an ISA.

But if the ISA is closed and funds moved to a non ISA account then there might be tax to pay by someone on the interest received from the non ISA account.

Thank you.

poppystar

poseidon1 said:

wilkko73 said:

My mum's estate is an excepted estate in terms of IHT but what about taxes that appear after death such as from Isa's mum has about £22k in of of those I need to close that down tomorrow when I get the paperwork to take to bank ,she only died a couple of weeks ago and I haven't got round to it.Will a tax demand appear from HMRC shortly after shutting it?Also what about monies received from pensions while alive with those pensions the tax is paid as you go along I hope.What is the best way to sort these things out?Do you write to HMRC or do they just send a bill? I have used Tell us once the day I got the death certificate

With regard to the isa, HMRC permits it to continue to generate tax free income and/or gains for up to 3 years after death or the end of the estate administration,  whichever is sooner. Therefore unless these funds will be needed quickly to pay estate liabilities you may wish to take advantage of  this concession for as long as it is feasible in the circumstances.

^^exactly this. Keep the ISA for as long as possible if it is earning a good rate of interest. I had one institution insist an ISA had to be closed and did so. A letter of complaint eventually got me all the back interest the ISA should have earned over the three years plus a nice little compensation for me. If it hadn’t have been for another ISA with a different bank I wouldn’t have known about the three years. 

poseidon1

wilkko73 said:

poseidon1 said:

wilkko73 said:

My mum's estate is an excepted estate in terms of IHT but what about taxes that appear after death such as from Isa's mum has about £22k in of of those I need to close that down tomorrow when I get the paperwork to take to bank ,she only died a couple of weeks ago and I haven't got round to it.Will a tax demand appear from HMRC shortly after shutting it?Also what about monies received from pensions while alive with those pensions the tax is paid as you go along I hope.What is the best way to sort these things out?Do you write to HMRC or do they just send a bill? I have used Tell us once the day I got the death certificate

With regard to the isa, HMRC permits it to continue to generate tax free income and/or gains for up to 3 years after death or the end of the estate administration,  whichever is sooner. Therefore unless these funds will be needed quickly to pay estate liabilities you may wish to take advantage of  this concession for as long as it is feasible in the circumstances.

Hi thank you,sadly I need the funds to pay towards a small care bill

Needs must.