We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
Interest / Tax - Prudential Bond payment after death



Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest
received and Income Tax paid fall within my Mum's Personal Allowance
for the 2024/25 Tax Year so potentially a repayment of the Income Tax
deducted or does it fall elsewhere ?
Thanks in
advance.
Comments
-
Funkyfreddy said:
Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
In which case basic rate tax deduction would be correct.1 -
Funkyfreddy said:
Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
However did Prudential issue a chargeable event certificate for any bond gains realised at death?
If so, those bond 'income gains' may well be reportable on your mother's final tax return. There will be no income tax repayable ( bond gains deemed to be net of 20% income tax), but potentially higher rate income tax depending on the quantum of gain and your mother's other income sources in year of death.1 -
Dazed_and_C0nfused said:Funkyfreddy said:
Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
In which case basic rate tax deduction would be correct.
So the Income Tax @ BR on interest accrued is not recoverable by "anybody" as it were ?
Thanks.0 -
Funkyfreddy said:Dazed_and_C0nfused said:Funkyfreddy said:
Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
In which case basic rate tax deduction would be correct.
So the Income Tax @ BR on interest accrued is not recoverable by "anybody" as it were ?
Thanks.
https://www.litrg.org.uk/tax-nic/trusts-and-estates/bereavement-tax-issues-death/tax-income-and-gains-after-death1 -
poseidon1 said:Funkyfreddy said:
Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
However did Prudential issue a chargeable event certificate for any bond gains realised at death?
If so, those bond 'income gains' may well be reportable on your mother's final tax return. There will be no income tax repayable ( bond gains deemed to be net of 20% income tax), but potentially higher rate income tax depending on the quantum of gain and your mother's other income sources in year of death.
Thanks Poseidon,
There was chargeable event certificate with a figure of "Notional tax" due at the BR.0 -
Funkyfreddy said:poseidon1 said:Funkyfreddy said:
Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
However did Prudential issue a chargeable event certificate for any bond gains realised at death?
If so, those bond 'income gains' may well be reportable on your mother's final tax return. There will be no income tax repayable ( bond gains deemed to be net of 20% income tax), but potentially higher rate income tax depending on the quantum of gain and your mother's other income sources in year of death.
Thanks Poseidon,
There was chargeable event certificate with a figure of "Notional tax" due at the BR.
The certificate should have indicated the possibility of an income tax liabilty at 40% subject to top slicing relief mitigation. The article below explains the position -
https://techzone.abrdn.com/public/iht-est-plan/dealing-investments-after-death#:~:text=Death of the last life assured&text=The gain is taxed in,used for chargeable event purposes.1 -
Dazed_and_C0nfused said:Funkyfreddy said:Dazed_and_C0nfused said:Funkyfreddy said:
Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
In which case basic rate tax deduction would be correct.
So the Income Tax @ BR on interest accrued is not recoverable by "anybody" as it were ?
Thanks.
https://www.litrg.org.uk/tax-nic/trusts-and-estates/bereavement-tax-issues-death/tax-income-and-gains-after-death
I'd expect there may be some additional interest during the administration period from another Aviva Bond I'm waiting on being settled along with a Cash Savings account will be some interest from another savings.
https://www.gov.uk/probate-estate/reporting-the-estate
0 -
poseidon1 said:Funkyfreddy said:poseidon1 said:Funkyfreddy said:
Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
However did Prudential issue a chargeable event certificate for any bond gains realised at death?
If so, those bond 'income gains' may well be reportable on your mother's final tax return. There will be no income tax repayable ( bond gains deemed to be net of 20% income tax), but potentially higher rate income tax depending on the quantum of gain and your mother's other income sources in year of death.
Thanks Poseidon,
There was chargeable event certificate with a figure of "Notional tax" due at the BR.
The certificate should have indicated the possibility of an income tax liabilty at 40% subject to top slicing relief mitigation. The article below explains the position -
https://techzone.abrdn.com/public/iht-est-plan/dealing-investments-after-death#:~:text=Death of the last life assured&text=The gain is taxed in,used for chargeable event purposes.poseidon1 said:Funkyfreddy said:poseidon1 said:Funkyfreddy said:Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
However did Prudential issue a chargeable event certificate for any bond gains realised at death?
If so, those bond 'income gains' may well be reportable on your mother's final tax return. There will be no income tax repayable ( bond gains deemed to be net of 20% income tax), but potentially higher rate income tax depending on the quantum of gain and your mother's other income sources in year of death.
Thanks Poseidon,
There was chargeable event certificate with a figure of "Notional tax" due at the BR.
The certificate should have indicated the possibility of an income tax liabilty at 40% subject to top slicing relief mitigation. The article below explains the position -
https://techzone.abrdn.com/public/iht-est-plan/dealing-investments-after-death#:~:text=Death of the last life assured&text=The gain is taxed in,used for chargeable event purposes.
Thanks again P.
I haven't as yet - the Chargeable Event for the Bond was last year, correspondence relating to the Bond being paid was dated the 1st April - both 2024/25 Tax Year with the funds received on the current 2025/26 Tax Year. It was a substantial gain over 30+ years.
Mum had a another Bond with Aviva which has yet to be paid but again there was a Chargeable Event when she passed- gin was over close to 30 years.
I need to get my head around Top Slicing relief by the look of it but the thought is now in my head that value of the Bonds, including the gain were reported to HMRC for IHT / Probate
0 -
Funkyfreddy said:poseidon1 said:Funkyfreddy said:poseidon1 said:Funkyfreddy said:
Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
However did Prudential issue a chargeable event certificate for any bond gains realised at death?
If so, those bond 'income gains' may well be reportable on your mother's final tax return. There will be no income tax repayable ( bond gains deemed to be net of 20% income tax), but potentially higher rate income tax depending on the quantum of gain and your mother's other income sources in year of death.
Thanks Poseidon,
There was chargeable event certificate with a figure of "Notional tax" due at the BR.
The certificate should have indicated the possibility of an income tax liabilty at 40% subject to top slicing relief mitigation. The article below explains the position -
https://techzone.abrdn.com/public/iht-est-plan/dealing-investments-after-death#:~:text=Death of the last life assured&text=The gain is taxed in,used for chargeable event purposes.poseidon1 said:Funkyfreddy said:poseidon1 said:Funkyfreddy said:Howdo,
Just before I make some calls to HMRC....
My Mum who passed away last year had a Bond with Prudential and with Probate granted a claim was made for this to be paid.
In addition to the value given when my Mum passed there has been an Interest payment added to the payment made to the Executors with Income Tax at the Basic Rate deducted by Prudential.to reflect the period the claim was outstanding.
Does the Interest received and Income Tax paid fall within my Mum's Personal Allowance for the 2024/25 Tax Year so potentially a repayment of the Income Tax deducted or does it fall elsewhere ?
Thanks in advance.
However did Prudential issue a chargeable event certificate for any bond gains realised at death?
If so, those bond 'income gains' may well be reportable on your mother's final tax return. There will be no income tax repayable ( bond gains deemed to be net of 20% income tax), but potentially higher rate income tax depending on the quantum of gain and your mother's other income sources in year of death.
Thanks Poseidon,
There was chargeable event certificate with a figure of "Notional tax" due at the BR.
The certificate should have indicated the possibility of an income tax liabilty at 40% subject to top slicing relief mitigation. The article below explains the position -
https://techzone.abrdn.com/public/iht-est-plan/dealing-investments-after-death#:~:text=Death of the last life assured&text=The gain is taxed in,used for chargeable event purposes.
Thanks again P.
I haven't as yet - the Chargeable Event for the Bond was last year, correspondence relating to the Bond being paid was dated the 1st April - both 2024/25 Tax Year with the funds received on the current 2025/26 Tax Year. It was a substantial gain over 30+ years.
Mum had a another Bond with Aviva which has yet to be paid but again there was a Chargeable Event when she passed- gin was over close to 30 years.
I need to get my head around Top Slicing relief by the look of it but the thought is now in my head that value of the Bonds, including the gain were reported to HMRC for IHT / Probate
https://community.hmrc.gov.uk/customerforums/pt/7636cf79-d75b-ef11-a4e5-6045bd0ddbf9
Worth noting that if there was an IHT liability arising on your mother's death, and an income tax liability emerges by reference to the bond gains, this should be a debt at death upon which IHT relief can be claimed.0
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 349.8K Banking & Borrowing
- 252.6K Reduce Debt & Boost Income
- 453K Spending & Discounts
- 242.7K Work, Benefits & Business
- 619.5K Mortgages, Homes & Bills
- 176.4K Life & Family
- 255.6K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 15.1K Coronavirus Support Boards