Reporting an estate's income to HMRC

jem16

Our lawyer will deal with the reporting of my late father's estate income to HMRC and I know where we stand with respect to interest and dividends.

However can I just clarify the position on his Shares and Property please?

Total value of shares at date of death was £11,315.08. Total value on sale was £12,426.85 so a slight gain.

House was valued at £230k and under offer for £230k so no gain. I know various expenses could be deducted from this for conveyancing and marketing etc.

So it appears that there is no CGT to be paid as the gain on the shares is within the £3k estate allowance and perhaps can be offset anyway with the losses from the house - not that this is required.

So no CGT to be reported and paid within 60 days if I'm correct but is anything actually listed when the lawyer reports to the estate's income to HMRC? I want to be aware of the situation in case the lawyer says she needs to ask a tax accountant if CGT is due.

poseidon1

jem16 said:

Our lawyer will deal with the reporting of my late father's estate income to HMRC and I know where we stand with respect to interest and dividends.

However can I just clarify the position on his Shares and Property please?

Total value of shares at date of death was £11,315.08. Total value on sale was £12,426.85 so a slight gain.

House was valued at £230k and under offer for £230k so no gain. I know various expenses could be deducted from this for conveyancing and marketing etc.

So it appears that there is no CGT to be paid as the gain on the shares is within the £3k estate allowance and perhaps can be offset anyway with the losses from the house - not that this is required.

So no CGT to be reported and paid within 60 days if I'm correct but is anything actually listed when the lawyer reports to the estate's income to HMRC? I want to be aware of the situation in case the lawyer says she needs to ask a tax accountant if CGT is due.

I believe I clarified the CGT position within your last thread below -

https://forums.moneysavingexpert.com/discussion/6623084/is-cgt-payable-or-not-on-house-sale-after-2nd-death#latest

Nothing in your current thread has changed that response, unless you found the veracity of that response  in some way questionable?

jem16

poseidon1 said:

jem16 said:

Our lawyer will deal with the reporting of my late father's estate income to HMRC and I know where we stand with respect to interest and dividends.

However can I just clarify the position on his Shares and Property please?

Total value of shares at date of death was £11,315.08. Total value on sale was £12,426.85 so a slight gain.

House was valued at £230k and under offer for £230k so no gain. I know various expenses could be deducted from this for conveyancing and marketing etc.

So it appears that there is no CGT to be paid as the gain on the shares is within the £3k estate allowance and perhaps can be offset anyway with the losses from the house - not that this is required.

So no CGT to be reported and paid within 60 days if I'm correct but is anything actually listed when the lawyer reports to the estate's income to HMRC? I want to be aware of the situation in case the lawyer says she needs to ask a tax accountant if CGT is due.

I believe I clarified the CGT position within your last thread below -

https://forums.moneysavingexpert.com/discussion/6623084/is-cgt-payable-or-not-on-house-sale-after-2nd-death#latest

Nothing in your current thread has changed that response, unless you found the veracity of that response  in some way questionable?

Yes you did and it's what I've based my understanding on. Thanks again for this.

My question this time was more with respect to the estate reporting to HMRC that the lawyer will do rather than if CGT is due or not which I know it isn't due to your helpful reply the last time.

poseidon1

jem16 said:

poseidon1 said:

jem16 said:

Our lawyer will deal with the reporting of my late father's estate income to HMRC and I know where we stand with respect to interest and dividends.

However can I just clarify the position on his Shares and Property please?

Total value of shares at date of death was £11,315.08. Total value on sale was £12,426.85 so a slight gain.

House was valued at £230k and under offer for £230k so no gain. I know various expenses could be deducted from this for conveyancing and marketing etc.

So it appears that there is no CGT to be paid as the gain on the shares is within the £3k estate allowance and perhaps can be offset anyway with the losses from the house - not that this is required.

So no CGT to be reported and paid within 60 days if I'm correct but is anything actually listed when the lawyer reports to the estate's income to HMRC? I want to be aware of the situation in case the lawyer says she needs to ask a tax accountant if CGT is due.

I believe I clarified the CGT position within your last thread below -

https://forums.moneysavingexpert.com/discussion/6623084/is-cgt-payable-or-not-on-house-sale-after-2nd-death#latest

Nothing in your current thread has changed that response, unless you found the veracity of that response  in some way questionable?

Yes you did and it's what I've based my understanding on. Thanks again for this.

My question this time was more with respect to the estate reporting to HMRC that the lawyer will do rather than if CGT is due or not which I know it isn't due to your helpful reply the last time.

Depends if they choose to use the informal route  ( by letter ) for reporting estate tax liabilties under the £10,000 threshold. 

Otherwise if total estate tax is under £500 ( income and capital gains tax) there is nothing at all to report to HMRC- see below

https://www.gov.uk/probate-estate/reporting-the-estate#:~:text=From 6 April 2024, if,one year to the next

Therefore if for 2024/25  tax year and the current tax year ( 2025/26) all taxes are less than £500 for each year, HMRC specifically do not require reporting to be made. The estate and therefore the beneficiaries get the estate income in this circumstance tax free.

What is the likely quantum of taxable estate income for those years?

jem16

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

Our lawyer will deal with the reporting of my late father's estate income to HMRC and I know where we stand with respect to interest and dividends.

However can I just clarify the position on his Shares and Property please?

Total value of shares at date of death was £11,315.08. Total value on sale was £12,426.85 so a slight gain.

House was valued at £230k and under offer for £230k so no gain. I know various expenses could be deducted from this for conveyancing and marketing etc.

So it appears that there is no CGT to be paid as the gain on the shares is within the £3k estate allowance and perhaps can be offset anyway with the losses from the house - not that this is required.

So no CGT to be reported and paid within 60 days if I'm correct but is anything actually listed when the lawyer reports to the estate's income to HMRC? I want to be aware of the situation in case the lawyer says she needs to ask a tax accountant if CGT is due.

I believe I clarified the CGT position within your last thread below -

https://forums.moneysavingexpert.com/discussion/6623084/is-cgt-payable-or-not-on-house-sale-after-2nd-death#latest

Nothing in your current thread has changed that response, unless you found the veracity of that response  in some way questionable?

Yes you did and it's what I've based my understanding on. Thanks again for this.

My question this time was more with respect to the estate reporting to HMRC that the lawyer will do rather than if CGT is due or not which I know it isn't due to your helpful reply the last time.

Depends if they choose to use the informal route  ( by letter ) for reporting estate tax liabilties under the £10,000 threshold. 

Otherwise if total estate tax is under £500 ( income and capital gains tax) there is nothing at all to report to HMRC- see below

https://www.gov.uk/probate-estate/reporting-the-estate#:~:text=From 6 April 2024, if,one year to the next

Therefore if for 2024/25  tax year and the current tax year ( 2025/26) all taxes are less than £500 for each year, HMRC specifically do not require reporting to be made. The estate and therefore the beneficiaries get the estate income in this circumstance tax free.

What is the likely quantum of taxable estate income for those years?

She’s already mentioned using the informal route by letter.

Total tax due will be over £500 but less than £10,000.

poseidon1

jem16 said:

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

Our lawyer will deal with the reporting of my late father's estate income to HMRC and I know where we stand with respect to interest and dividends.

However can I just clarify the position on his Shares and Property please?

Total value of shares at date of death was £11,315.08. Total value on sale was £12,426.85 so a slight gain.

House was valued at £230k and under offer for £230k so no gain. I know various expenses could be deducted from this for conveyancing and marketing etc.

So it appears that there is no CGT to be paid as the gain on the shares is within the £3k estate allowance and perhaps can be offset anyway with the losses from the house - not that this is required.

So no CGT to be reported and paid within 60 days if I'm correct but is anything actually listed when the lawyer reports to the estate's income to HMRC? I want to be aware of the situation in case the lawyer says she needs to ask a tax accountant if CGT is due.

I believe I clarified the CGT position within your last thread below -

https://forums.moneysavingexpert.com/discussion/6623084/is-cgt-payable-or-not-on-house-sale-after-2nd-death#latest

Nothing in your current thread has changed that response, unless you found the veracity of that response  in some way questionable?

Yes you did and it's what I've based my understanding on. Thanks again for this.

My question this time was more with respect to the estate reporting to HMRC that the lawyer will do rather than if CGT is due or not which I know it isn't due to your helpful reply the last time.

Depends if they choose to use the informal route  ( by letter ) for reporting estate tax liabilties under the £10,000 threshold. 

Otherwise if total estate tax is under £500 ( income and capital gains tax) there is nothing at all to report to HMRC- see below

https://www.gov.uk/probate-estate/reporting-the-estate#:~:text=From 6 April 2024, if,one year to the next

Therefore if for 2024/25  tax year and the current tax year ( 2025/26) all taxes are less than £500 for each year, HMRC specifically do not require reporting to be made. The estate and therefore the beneficiaries get the estate income in this circumstance tax free.

What is the likely quantum of taxable estate income for those years?

She’s already mentioned using the informal route by letter.

Total tax due will be over £500 but less than £10,000.

If going down the letter route, then they will declare the income liable to be taxed, mention that property losses outweigh gains on share sales ( so no CGT) and offer to  immediately settle all tax due to mark the completion of estate tax compliance.

In my days in private practice  we would have accompanied the letter with a cheque for the tax due to speed up receipt of HMRC clearance. That said I have heard anecdotally ( on this forum ), that HMRC are not accepting cheques and they have a backlog in dealing with informal tax reporting. No doubt the  solicitor will be aware  whether  or not this is true.

jem16

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

Our lawyer will deal with the reporting of my late father's estate income to HMRC and I know where we stand with respect to interest and dividends.

However can I just clarify the position on his Shares and Property please?

Total value of shares at date of death was £11,315.08. Total value on sale was £12,426.85 so a slight gain.

House was valued at £230k and under offer for £230k so no gain. I know various expenses could be deducted from this for conveyancing and marketing etc.

So it appears that there is no CGT to be paid as the gain on the shares is within the £3k estate allowance and perhaps can be offset anyway with the losses from the house - not that this is required.

So no CGT to be reported and paid within 60 days if I'm correct but is anything actually listed when the lawyer reports to the estate's income to HMRC? I want to be aware of the situation in case the lawyer says she needs to ask a tax accountant if CGT is due.

I believe I clarified the CGT position within your last thread below -

https://forums.moneysavingexpert.com/discussion/6623084/is-cgt-payable-or-not-on-house-sale-after-2nd-death#latest

Nothing in your current thread has changed that response, unless you found the veracity of that response  in some way questionable?

Yes you did and it's what I've based my understanding on. Thanks again for this.

My question this time was more with respect to the estate reporting to HMRC that the lawyer will do rather than if CGT is due or not which I know it isn't due to your helpful reply the last time.

Depends if they choose to use the informal route  ( by letter ) for reporting estate tax liabilties under the £10,000 threshold. 

Otherwise if total estate tax is under £500 ( income and capital gains tax) there is nothing at all to report to HMRC- see below

https://www.gov.uk/probate-estate/reporting-the-estate#:~:text=From 6 April 2024, if,one year to the next

Therefore if for 2024/25  tax year and the current tax year ( 2025/26) all taxes are less than £500 for each year, HMRC specifically do not require reporting to be made. The estate and therefore the beneficiaries get the estate income in this circumstance tax free.

What is the likely quantum of taxable estate income for those years?

She’s already mentioned using the informal route by letter.

Total tax due will be over £500 but less than £10,000.

If going down the letter route, then they will declare the income liable to be taxed, mention that property losses outweigh gains on share sales ( so no CGT) and offer to  immediately settle all tax due to mark the completion of estate tax compliance.

In my days in private practice  we would have accompanied the letter with a cheque for the tax due to speed up receipt of HMRC clearance. That said I have heard anecdotally ( on this forum ), that HMRC are not accepting cheques and they have a backlog in dealing with informal tax reporting. No doubt the  solicitor will be aware  whether  or not this is true.

When she was dealing with my Mum’s estate last year, she sent an informal letter which was followed by a letter to me from HMRC with respect to tax due. HMRC said that they were writing to me as the personal representative as they held no mandate from the solicitors to deal with it. So I expect the same this year. 

I think I will ask her what she plans to say in this letter with respect to CGT as there have been a few mistakes which I’ve had to check and clarify this time around. 

Thank you for your guidance on this. 

poseidon1

jem16 said:

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

Our lawyer will deal with the reporting of my late father's estate income to HMRC and I know where we stand with respect to interest and dividends.

However can I just clarify the position on his Shares and Property please?

Total value of shares at date of death was £11,315.08. Total value on sale was £12,426.85 so a slight gain.

House was valued at £230k and under offer for £230k so no gain. I know various expenses could be deducted from this for conveyancing and marketing etc.

So it appears that there is no CGT to be paid as the gain on the shares is within the £3k estate allowance and perhaps can be offset anyway with the losses from the house - not that this is required.

So no CGT to be reported and paid within 60 days if I'm correct but is anything actually listed when the lawyer reports to the estate's income to HMRC? I want to be aware of the situation in case the lawyer says she needs to ask a tax accountant if CGT is due.

I believe I clarified the CGT position within your last thread below -

https://forums.moneysavingexpert.com/discussion/6623084/is-cgt-payable-or-not-on-house-sale-after-2nd-death#latest

Nothing in your current thread has changed that response, unless you found the veracity of that response  in some way questionable?

Yes you did and it's what I've based my understanding on. Thanks again for this.

My question this time was more with respect to the estate reporting to HMRC that the lawyer will do rather than if CGT is due or not which I know it isn't due to your helpful reply the last time.

Depends if they choose to use the informal route  ( by letter ) for reporting estate tax liabilties under the £10,000 threshold. 

Otherwise if total estate tax is under £500 ( income and capital gains tax) there is nothing at all to report to HMRC- see below

https://www.gov.uk/probate-estate/reporting-the-estate#:~:text=From 6 April 2024, if,one year to the next

Therefore if for 2024/25  tax year and the current tax year ( 2025/26) all taxes are less than £500 for each year, HMRC specifically do not require reporting to be made. The estate and therefore the beneficiaries get the estate income in this circumstance tax free.

What is the likely quantum of taxable estate income for those years?

She’s already mentioned using the informal route by letter.

Total tax due will be over £500 but less than £10,000.

If going down the letter route, then they will declare the income liable to be taxed, mention that property losses outweigh gains on share sales ( so no CGT) and offer to  immediately settle all tax due to mark the completion of estate tax compliance.

In my days in private practice  we would have accompanied the letter with a cheque for the tax due to speed up receipt of HMRC clearance. That said I have heard anecdotally ( on this forum ), that HMRC are not accepting cheques and they have a backlog in dealing with informal tax reporting. No doubt the  solicitor will be aware  whether  or not this is true.

When she was dealing with my Mum’s estate last year, she sent an informal letter which was followed by a letter to me from HMRC with respect to tax due. HMRC said that they were writing to me as the personal representative as they held no mandate from the solicitors to deal with it. So I expect the same this year. 

I think I will ask her what she plans to say in this letter with respect to CGT as there have been a few mistakes which I’ve had to check and clarify this time around. 

Thank you for your guidance on this. 

Sounds as if in your mum's case the firm did not have a tax agent authority in place on behalf of the estate executors . This used to be via form 64-8 , but more recently part 2 of  form p1000 (available to download since July 2024) is HMRC's preferred option  for estates - see below - 

https://assets.publishing.service.gov.uk/media/687a3caea8ee0c6e06f45290/P1000_form.pdf

Failing to register tax agency authority is a bit of a rookie error from someone evidently not as familiar as they should be  with HMRC administrative practices.

Is there a form p1000 now in place for your father's estate? If not, does not sound as if this solicitor is really up to the task you are paying her for. You really don't want to be in the position of ' having a dog and barking yourself'.

jem16

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

Our lawyer will deal with the reporting of my late father's estate income to HMRC and I know where we stand with respect to interest and dividends.

However can I just clarify the position on his Shares and Property please?

Total value of shares at date of death was £11,315.08. Total value on sale was £12,426.85 so a slight gain.

House was valued at £230k and under offer for £230k so no gain. I know various expenses could be deducted from this for conveyancing and marketing etc.

So it appears that there is no CGT to be paid as the gain on the shares is within the £3k estate allowance and perhaps can be offset anyway with the losses from the house - not that this is required.

So no CGT to be reported and paid within 60 days if I'm correct but is anything actually listed when the lawyer reports to the estate's income to HMRC? I want to be aware of the situation in case the lawyer says she needs to ask a tax accountant if CGT is due.

I believe I clarified the CGT position within your last thread below -

https://forums.moneysavingexpert.com/discussion/6623084/is-cgt-payable-or-not-on-house-sale-after-2nd-death#latest

Nothing in your current thread has changed that response, unless you found the veracity of that response  in some way questionable?

Yes you did and it's what I've based my understanding on. Thanks again for this.

My question this time was more with respect to the estate reporting to HMRC that the lawyer will do rather than if CGT is due or not which I know it isn't due to your helpful reply the last time.

Depends if they choose to use the informal route  ( by letter ) for reporting estate tax liabilties under the £10,000 threshold. 

Otherwise if total estate tax is under £500 ( income and capital gains tax) there is nothing at all to report to HMRC- see below

https://www.gov.uk/probate-estate/reporting-the-estate#:~:text=From 6 April 2024, if,one year to the next

Therefore if for 2024/25  tax year and the current tax year ( 2025/26) all taxes are less than £500 for each year, HMRC specifically do not require reporting to be made. The estate and therefore the beneficiaries get the estate income in this circumstance tax free.

What is the likely quantum of taxable estate income for those years?

She’s already mentioned using the informal route by letter.

Total tax due will be over £500 but less than £10,000.

If going down the letter route, then they will declare the income liable to be taxed, mention that property losses outweigh gains on share sales ( so no CGT) and offer to  immediately settle all tax due to mark the completion of estate tax compliance.

In my days in private practice  we would have accompanied the letter with a cheque for the tax due to speed up receipt of HMRC clearance. That said I have heard anecdotally ( on this forum ), that HMRC are not accepting cheques and they have a backlog in dealing with informal tax reporting. No doubt the  solicitor will be aware  whether  or not this is true.

When she was dealing with my Mum’s estate last year, she sent an informal letter which was followed by a letter to me from HMRC with respect to tax due. HMRC said that they were writing to me as the personal representative as they held no mandate from the solicitors to deal with it. So I expect the same this year. 

I think I will ask her what she plans to say in this letter with respect to CGT as there have been a few mistakes which I’ve had to check and clarify this time around. 

Thank you for your guidance on this. 

Sounds as if in your mum's case the firm did not have a tax agent authority in place on behalf of the estate executors . This used to be via form 64-8 , but more recently part 2 of  form p1000 (available to download since July 2024) is HMRC's preferred option  for estates - see below - 

https://assets.publishing.service.gov.uk/media/687a3caea8ee0c6e06f45290/P1000_form.pdf

Failing to register tax agency authority is a bit of a rookie error from someone evidently not as familiar as they should be  with HMRC administrative practices.

Is there a form p1000 now in place for your father's estate? If not, does not sound as if this solicitor is really up to the task you are paying her for. You really don't want to be in the position of ' having a dog and barking yourself'.

I doubt that there is as I've certainly not signed anything to allow it. I didn't see any point with my Mum's estate after I got the bill as it wasn't a large amount so I just dealt with it. Dad's will be a bit larger but to be honest I'd rather see what's happening anyway rather than it just being handled for me and a mistake being made.

Sometimes I wonder if I should just have handled it all myself anyway.

tooldle

There is certainly a delay with HMRC. I’m waiting on clearance from HMRC for capital gains and estate income. A call is made every month and, the response is always ‘letter is in the queue and should be processed within the month’. We’ve been waiting for 9 months so far. Brace yourself for a wait. 

jem16

tooldle said:

There is certainly a delay with HMRC. I’m waiting on clearance from HMRC for capital gains and estate income. A call is made every month and, the response is always ‘letter is in the queue and should be processed within the month’. We’ve been waiting for 9 months so far. Brace yourself for a wait. 

Seems to be a delay with everything in HMRC just now. Dad’s tax bill for 2023/24 took until March 2025 to be received. I’m still waiting on the calculation for 2024/25 although they helpfully told me I could pay it back in March 2025 based on interest figures for 2023/24 which I declined to do as the interest was less. 

I’ve worked out what his likely bill will be for 2024/25 and the estate administration period although can’t finalise that until we choose to release the funds held by the solicitor which I’m in no hurry to do at the moment.