Reporting an estate's income to HMRC

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.

I asked our lawyer what she would report and the reply is that they only report any interest or income received for the administration period.

Also says they don't deal with CGT and it would normally be referred to an accountant.

So in the absence of it being reported by the lawyer but no CGT due, do I need to send HMRC a letter myself to keep myself right?

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.

I asked our lawyer what she would report and the reply is that they only report any interest or income received for the administration period.

Also says they don't deal with CGT and it would normally be referred to an accountant.

So in the absence of it being reported by the lawyer but no CGT due, do I need to send HMRC a letter myself to keep myself right?

In view of that disappointing response from your solicitor ( ie they only partially handle estate tax compliance), I can see absolutely no point you paying them to handle the informal tax reporting letter at all.  You may as well save on fees and do it yourself, especially if there is no P1000 in place granting the solicitor authority to handle estate tax reporting.

I suspect the guidance and pointers you have received on this forum, has probably armed you with more knowledge in this regard than that  possessed by the solicitor. 

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.

I asked our lawyer what she would report and the reply is that they only report any interest or income received for the administration period.

Also says they don't deal with CGT and it would normally be referred to an accountant.

So in the absence of it being reported by the lawyer but no CGT due, do I need to send HMRC a letter myself to keep myself right?

In view of that disappointing response from your solicitor ( ie they only partially handle estate tax compliance), I can see absolutely no point you paying them to handle the informal tax reporting letter at all.  You may as well save on fees and do it yourself, especially if there is no P1000 in place granting the solicitor authority to handle estate tax reporting.

I suspect the guidance and pointers you have received on this forum, has probably armed you with more knowledge in this regard than that  possessed by the solicitor. 

Yes I agree with you although the fee seems to have been agreed by the auditors now so probably included that. I’d also have to get the interest from her for the funds they hold so probably would get charged for that. 

If she does as she says and reports only that interest and dividends, does anything else have to be done given that no CGT will be due? My main concern is that reporting is done correctly and yes I have more knowledge from discussions on here. Again thank you.

poseidon1

jem16 said:

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.

I asked our lawyer what she would report and the reply is that they only report any interest or income received for the administration period.

Also says they don't deal with CGT and it would normally be referred to an accountant.

So in the absence of it being reported by the lawyer but no CGT due, do I need to send HMRC a letter myself to keep myself right?

In view of that disappointing response from your solicitor ( ie they only partially handle estate tax compliance), I can see absolutely no point you paying them to handle the informal tax reporting letter at all.  You may as well save on fees and do it yourself, especially if there is no P1000 in place granting the solicitor authority to handle estate tax reporting.

I suspect the guidance and pointers you have received on this forum, has probably armed you with more knowledge in this regard than that  possessed by the solicitor. 

Yes I agree with you although the fee seems to have been agreed by the auditors now so probably included that. I’d also have to get the interest from her for the funds they hold so probably would get charged for that. 

If she does as she says and reports only that interest and dividends, does anything else have to be done given that no CGT will be due? My main concern is that reporting is done correctly and yes I have more knowledge from discussions on here. Again thank you.

Yes with no CGT to worry about, just income tax to be accurately calculated and the tax paid.

 However is interest still continuing to accrue on solicitors deposited funds, if so you need a cut off figure. How do they propose to ascertain that?

jem16

poseidon1 said:

jem16 said:

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.

I asked our lawyer what she would report and the reply is that they only report any interest or income received for the administration period.

Also says they don't deal with CGT and it would normally be referred to an accountant.

So in the absence of it being reported by the lawyer but no CGT due, do I need to send HMRC a letter myself to keep myself right?

In view of that disappointing response from your solicitor ( ie they only partially handle estate tax compliance), I can see absolutely no point you paying them to handle the informal tax reporting letter at all.  You may as well save on fees and do it yourself, especially if there is no P1000 in place granting the solicitor authority to handle estate tax reporting.

I suspect the guidance and pointers you have received on this forum, has probably armed you with more knowledge in this regard than that  possessed by the solicitor. 

Yes I agree with you although the fee seems to have been agreed by the auditors now so probably included that. I’d also have to get the interest from her for the funds they hold so probably would get charged for that. 

If she does as she says and reports only that interest and dividends, does anything else have to be done given that no CGT will be due? My main concern is that reporting is done correctly and yes I have more knowledge from discussions on here. Again thank you.

Yes with no CGT to worry about, just income tax to be accurately calculated and the tax paid.

 However is interest still continuing to accrue on solicitors deposited funds, if so you need a cut off figure. How do they propose to ascertain that?

Proposed entry date with regards to the house sale isn’t until 31st October so unless we want the funds released now (which we don’t as I want to see the final total unless house sale is delayed) nothing will be reported until that point. 

It’s all being discussed now as she wanted to get the estate fees audited now as all the work on that has been done and the conveyancing fee is separate. Seemed a bit premature but she said it wouldn’t change even if we kept the funds there. 

So I’ve no need to worry that CGT isn’t being reported as none is due?

poseidon1

jem16 said:

poseidon1 said:

jem16 said:

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.

I asked our lawyer what she would report and the reply is that they only report any interest or income received for the administration period.

Also says they don't deal with CGT and it would normally be referred to an accountant.

So in the absence of it being reported by the lawyer but no CGT due, do I need to send HMRC a letter myself to keep myself right?

In view of that disappointing response from your solicitor ( ie they only partially handle estate tax compliance), I can see absolutely no point you paying them to handle the informal tax reporting letter at all.  You may as well save on fees and do it yourself, especially if there is no P1000 in place granting the solicitor authority to handle estate tax reporting.

I suspect the guidance and pointers you have received on this forum, has probably armed you with more knowledge in this regard than that  possessed by the solicitor. 

Yes I agree with you although the fee seems to have been agreed by the auditors now so probably included that. I’d also have to get the interest from her for the funds they hold so probably would get charged for that. 

If she does as she says and reports only that interest and dividends, does anything else have to be done given that no CGT will be due? My main concern is that reporting is done correctly and yes I have more knowledge from discussions on here. Again thank you.

Yes with no CGT to worry about, just income tax to be accurately calculated and the tax paid.

 However is interest still continuing to accrue on solicitors deposited funds, if so you need a cut off figure. How do they propose to ascertain that?

Proposed entry date with regards to the house sale isn’t until 31st October so unless we want the funds released now (which we don’t as I want to see the final total unless house sale is delayed) nothing will be reported until that point. 

It’s all being discussed now as she wanted to get the estate fees audited now as all the work on that has been done and the conveyancing fee is separate. Seemed a bit premature but she said it wouldn’t change even if we kept the funds there. 

So I’ve no need to worry that CGT isn’t being reported as none is due?

You have no need to concern yourself, but the informal tax reporting letter has to cover all relevant estate taxes falling within the £10k threshold.

So solicitor has no option but to declare there is no CGT payable or due, otherwise it is an incomplete disclosure. Make sure she adds that declaration before approving despatch of that letter to HMRC. 

Hopefully you will not be using that firm for your own personal testamentary affairs in future.

jem16

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

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.

I asked our lawyer what she would report and the reply is that they only report any interest or income received for the administration period.

Also says they don't deal with CGT and it would normally be referred to an accountant.

So in the absence of it being reported by the lawyer but no CGT due, do I need to send HMRC a letter myself to keep myself right?

In view of that disappointing response from your solicitor ( ie they only partially handle estate tax compliance), I can see absolutely no point you paying them to handle the informal tax reporting letter at all.  You may as well save on fees and do it yourself, especially if there is no P1000 in place granting the solicitor authority to handle estate tax reporting.

I suspect the guidance and pointers you have received on this forum, has probably armed you with more knowledge in this regard than that  possessed by the solicitor. 

Yes I agree with you although the fee seems to have been agreed by the auditors now so probably included that. I’d also have to get the interest from her for the funds they hold so probably would get charged for that. 

If she does as she says and reports only that interest and dividends, does anything else have to be done given that no CGT will be due? My main concern is that reporting is done correctly and yes I have more knowledge from discussions on here. Again thank you.

Yes with no CGT to worry about, just income tax to be accurately calculated and the tax paid.

 However is interest still continuing to accrue on solicitors deposited funds, if so you need a cut off figure. How do they propose to ascertain that?

Proposed entry date with regards to the house sale isn’t until 31st October so unless we want the funds released now (which we don’t as I want to see the final total unless house sale is delayed) nothing will be reported until that point. 

It’s all being discussed now as she wanted to get the estate fees audited now as all the work on that has been done and the conveyancing fee is separate. Seemed a bit premature but she said it wouldn’t change even if we kept the funds there. 

So I’ve no need to worry that CGT isn’t being reported as none is due?

You have no need to concern yourself, but the informal tax reporting letter has to cover all relevant estate taxes falling within the £10k threshold.

So solicitor has no option but to declare there is no CGT payable or due, otherwise it is an incomplete disclosure. Make sure she adds that declaration before approving despatch of that letter to HMRC. 

Hopefully you will not be using that firm for your own personal testamentary affairs in future.

The last time she sent such a letter for my late Mum’s estate, I neither saw it to approve nor knew anything about it until I received a letter from HMRC with a tax bill. My mother did have only one share sale and I’d need to look back to see if I have details of any gain or loss. No house involved at that point.

So if she doesn’t include that declaration, it’s her that’s on the hook for it and not me if HMRC followed it up? Or will I need to insist it’s mentioned or as executor I’m on the hook for it too? That’s my concern. 

poseidon1

jem16 said:

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

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.

I asked our lawyer what she would report and the reply is that they only report any interest or income received for the administration period.

Also says they don't deal with CGT and it would normally be referred to an accountant.

So in the absence of it being reported by the lawyer but no CGT due, do I need to send HMRC a letter myself to keep myself right?

In view of that disappointing response from your solicitor ( ie they only partially handle estate tax compliance), I can see absolutely no point you paying them to handle the informal tax reporting letter at all.  You may as well save on fees and do it yourself, especially if there is no P1000 in place granting the solicitor authority to handle estate tax reporting.

I suspect the guidance and pointers you have received on this forum, has probably armed you with more knowledge in this regard than that  possessed by the solicitor. 

Yes I agree with you although the fee seems to have been agreed by the auditors now so probably included that. I’d also have to get the interest from her for the funds they hold so probably would get charged for that. 

If she does as she says and reports only that interest and dividends, does anything else have to be done given that no CGT will be due? My main concern is that reporting is done correctly and yes I have more knowledge from discussions on here. Again thank you.

Yes with no CGT to worry about, just income tax to be accurately calculated and the tax paid.

 However is interest still continuing to accrue on solicitors deposited funds, if so you need a cut off figure. How do they propose to ascertain that?

Proposed entry date with regards to the house sale isn’t until 31st October so unless we want the funds released now (which we don’t as I want to see the final total unless house sale is delayed) nothing will be reported until that point. 

It’s all being discussed now as she wanted to get the estate fees audited now as all the work on that has been done and the conveyancing fee is separate. Seemed a bit premature but she said it wouldn’t change even if we kept the funds there. 

So I’ve no need to worry that CGT isn’t being reported as none is due?

You have no need to concern yourself, but the informal tax reporting letter has to cover all relevant estate taxes falling within the £10k threshold.

So solicitor has no option but to declare there is no CGT payable or due, otherwise it is an incomplete disclosure. Make sure she adds that declaration before approving despatch of that letter to HMRC. 

Hopefully you will not be using that firm for your own personal testamentary affairs in future.

The last time she sent such a letter for my late Mum’s estate, I neither saw it to approve nor knew anything about it until I received a letter from HMRC with a tax bill. My mother did have only one share sale and I’d need to look back to see if I have details of any gain or loss. No house involved at that point.

So if she doesn’t include that declaration, it’s her that’s on the hook for it and not me if HMRC followed it up? Or will I need to insist it’s mentioned or as executor I’m on the hook for it too? That’s my concern. 

Should be her entire responsibility, but we come full circle to the P1000 authority to act as the estate tax agent. They had no such authority in the case of your mother' s estate and you saw the outcome there. 

If you are resigned to the solicitor following through on this compliance, get them to supply you with the P1000 to sign off in their favour and lodge with HMRC asap. That way HMRC don't pester you when the time comes to settle this matter.

jem16

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:

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.

I asked our lawyer what she would report and the reply is that they only report any interest or income received for the administration period.

Also says they don't deal with CGT and it would normally be referred to an accountant.

So in the absence of it being reported by the lawyer but no CGT due, do I need to send HMRC a letter myself to keep myself right?

In view of that disappointing response from your solicitor ( ie they only partially handle estate tax compliance), I can see absolutely no point you paying them to handle the informal tax reporting letter at all.  You may as well save on fees and do it yourself, especially if there is no P1000 in place granting the solicitor authority to handle estate tax reporting.

I suspect the guidance and pointers you have received on this forum, has probably armed you with more knowledge in this regard than that  possessed by the solicitor. 

Yes I agree with you although the fee seems to have been agreed by the auditors now so probably included that. I’d also have to get the interest from her for the funds they hold so probably would get charged for that. 

If she does as she says and reports only that interest and dividends, does anything else have to be done given that no CGT will be due? My main concern is that reporting is done correctly and yes I have more knowledge from discussions on here. Again thank you.

Yes with no CGT to worry about, just income tax to be accurately calculated and the tax paid.

 However is interest still continuing to accrue on solicitors deposited funds, if so you need a cut off figure. How do they propose to ascertain that?

Proposed entry date with regards to the house sale isn’t until 31st October so unless we want the funds released now (which we don’t as I want to see the final total unless house sale is delayed) nothing will be reported until that point. 

It’s all being discussed now as she wanted to get the estate fees audited now as all the work on that has been done and the conveyancing fee is separate. Seemed a bit premature but she said it wouldn’t change even if we kept the funds there. 

So I’ve no need to worry that CGT isn’t being reported as none is due?

You have no need to concern yourself, but the informal tax reporting letter has to cover all relevant estate taxes falling within the £10k threshold.

So solicitor has no option but to declare there is no CGT payable or due, otherwise it is an incomplete disclosure. Make sure she adds that declaration before approving despatch of that letter to HMRC. 

Hopefully you will not be using that firm for your own personal testamentary affairs in future.

The last time she sent such a letter for my late Mum’s estate, I neither saw it to approve nor knew anything about it until I received a letter from HMRC with a tax bill. My mother did have only one share sale and I’d need to look back to see if I have details of any gain or loss. No house involved at that point.

So if she doesn’t include that declaration, it’s her that’s on the hook for it and not me if HMRC followed it up? Or will I need to insist it’s mentioned or as executor I’m on the hook for it too? That’s my concern. 

Should be her entire responsibility, but we come full circle to the P1000 authority to act as the estate tax agent. They had no such authority in the case of your mother' s estate and you saw the outcome there. 

If you are resigned to the solicitor following through on this compliance, get them to supply you with the P1000 to sign off in their favour and lodge with HMRC asap. That way HMRC don't pester you when the time comes to settle this matter.

Ok. I’ll probably let them handle the estate tax this time around so will suggest that. Then it’s all her problem although probably won’t be a problem with no CGT due anyway. 

I did reply to her earlier today saying that I’d assumed it would be mentioned as she mentioned shares and I know there was a gain on the shares. I’ll see what I get back.