Reporting a Simple Estate to HMRC

RS2OOO

Hi all,

I'm a rare poster as the answers I need are usually easy to find on here, but some extra clarification on this would put my mind at rest.

Mum died last summer, and had let out her home whilst battling cancer.

Probate's granted and as executor I'd like to tie in reporting the simple estate with the tax year end and simaultaniously distributing the estate to beneficiaries.

4 Months after death Mum's 2 year fixed rate savings bond matured, circa £1000 interest.
Does it matter that technically 20 Months of that interest was earned while she was alive (and would have been tax free), or do I report the full £1000 ?

Since death we've also earned around £10 in shares dividends which I shall report.

Finally, by end of March I'll have received about £10,000 in rental income from her home, but I have paid out around £3000 in repairs and maintenance.
Do I report £10,000 or £7000 as the income?

The lack of clarity comes from HMRCs wording which doesn't make it fool proof as to whether you should report income before or after expenses:

"a year by year breakdown of any income and capital gains for the whole administration period"


My thinking is that I should report as follows:
Savings interest: £1000
Dividends from shares: £10
Property rental income: £7000

Thanks in advance for any help.

Keep_pedalling

With rental income you are going to have complete a SA for the estate using SA900 & supplementary sheet SA903. You declare the rental and associated expenses on SA903.

https://assets.publishing.service.gov.uk/media/67dbf2d40f38d929e57ee31f/sa903_2025.pdf

RS2OOO

Keep_pedalling said:

With rental income you are going to have complete a SA for the estate using SA900 & supplementary sheet SA903. You declare the rental and associated expenses on SA903.

https://assets.publishing.service.gov.uk/media/67dbf2d40f38d929e57ee31f/sa903_2025.pdf

Thank you for this, its much appreciated.

Glad I posed the question, I had no idea, and didn't know about form SA903.

poseidon1

RS2OOO said:

Hi all,

I'm a rare poster as the answers I need are usually easy to find on here, but some extra clarification on this would put my mind at rest.

Mum died last summer, and had let out her home whilst battling cancer.

Probate's granted and as executor I'd like to tie in reporting the simple estate with the tax year end and simaultaniously distributing the estate to beneficiaries.

4 Months after death Mum's 2 year fixed rate savings bond matured, circa £1000 interest.
Does it matter that technically 20 Months of that interest was earned while she was alive (and would have been tax free), or do I report the full £1000 ?

Since death we've also earned around £10 in shares dividends which I shall report.

Finally, by end of March I'll have received about £10,000 in rental income from her home, but I have paid out around £3000 in repairs and maintenance.
Do I report £10,000 or £7000 as the income?

The lack of clarity comes from HMRCs wording which doesn't make it fool proof as to whether you should report income before or after expenses:

"a year by year breakdown of any income and capital gains for the whole administration period"


My thinking is that I should report as follows:
Savings interest: £1000
Dividends from shares: £10
Property rental income: £7000

Thanks in advance for any help.

For clarity, the informal tax reporting system can only be triggered if all aspects of the estate administration has been completed - guidance below

https://www.gov.uk/probate-estate/reporting-the-estate

In your case, assuming the estate property is still generating rent being collected by the executors and no attempt has yet been made to remove the property from the executor's ownership by way of an Assent in favour of the beneficiaries entitled to the property ( or sale ), then the estate administration remains ongoing. You will not have met the criteria for a final reporting of the entire tax payable by the estate for ' the whole of the administration period'.

So what is the current position with regard to the property and what are the executors intentions in dealing with it going forward ( sale or retain in the ownership of beneficiaries?).

As for the taxable income you quoted, the net rent was stated  as up to March 2025, so do the  interest and dividend  numbers solely relate to the period to 5 April 2025 ( ie the 2024/25) tax year? What is the quantum of estate income (if any) received so far for the current tax year?

RAS

Please do go over to the Housing Forum here and read up on your legal responsibilities as landlords, now as the "estate of mum" and as owners if you keep the property.

Get anything wrong and there can be financial penalties or issues trying to remove or replace the tenant. And you've got CGT liabilities on sale as well.

Just in case, if you are using an agent to manage the house, you are still legally liable for complying with the ever changing law, not the agent.

RS2OOO

RAS said:

Please do go over to the Housing Forum here and read up on your legal responsibilities as landlords, now as the "estate of mum" and as owners if you keep the property.

Get anything wrong and there can be financial penalties or issues trying to remove or replace the tenant. And you've got CGT liabilities on sale as well.

Just in case, if you are using an agent to manage the house, you are still legally liable for complying with the ever changing law, not the agent.

Thanks. 

I've done plenty of reading. 
The annual rental income (after tax) is less than the mortgage interest on my own home. Financially makes sense to issue S21 now before the new rules and sell up.
But I couldn't live with myself if I evicted someone from their home, so definitely need to get up to speed on the new rules!

RS2OOO

poseidon1 said:

RS2OOO said:

Hi all,

I'm a rare poster as the answers I need are usually easy to find on here, but some extra clarification on this would put my mind at rest.

Mum died last summer, and had let out her home whilst battling cancer.

Probate's granted and as executor I'd like to tie in reporting the simple estate with the tax year end and simaultaniously distributing the estate to beneficiaries.

4 Months after death Mum's 2 year fixed rate savings bond matured, circa £1000 interest.
Does it matter that technically 20 Months of that interest was earned while she was alive (and would have been tax free), or do I report the full £1000 ?

Since death we've also earned around £10 in shares dividends which I shall report.

Finally, by end of March I'll have received about £10,000 in rental income from her home, but I have paid out around £3000 in repairs and maintenance.
Do I report £10,000 or £7000 as the income?

The lack of clarity comes from HMRCs wording which doesn't make it fool proof as to whether you should report income before or after expenses:

"a year by year breakdown of any income and capital gains for the whole administration period"


My thinking is that I should report as follows:
Savings interest: £1000
Dividends from shares: £10
Property rental income: £7000

Thanks in advance for any help.

For clarity, the informal tax reporting system can only be triggered if all aspects of the estate administration has been completed - guidance below

https://www.gov.uk/probate-estate/reporting-the-estate

In your case, assuming the estate property is still generating rent being collected by the executors and no attempt has yet been made to remove the property from the executor's ownership by way of an Assent in favour of the beneficiaries entitled to the property ( or sale ), then the estate administration remains ongoing. You will not have met the criteria for a final reporting of the entire tax payable by the estate for ' the whole of the administration period'.

So what is the current position with regard to the property and what are the executors intentions in dealing with it going forward ( sale or retain in the ownership of beneficiaries?).

As for the taxable income you quoted, the net rent was stated  as up to March 2025, so do the  interest and dividend  numbers solely relate to the period to 5 April 2025 ( ie the 2024/25) tax year? What is the quantum of estate income (if any) received so far for the current tax year?

Hi,
The year I wish to report on is 2025 to 2026 - From date of death last summer to 31st March 2026, aiming to align with final distribution of the estate. (Tax return already filed and tax paid for the deceased up to date of death).

The Executors are the Beneficiaries of the let property, we are working through forms ID1, AS1 and AP1 to transfer the title. Everything else has already been distributed.

poseidon1

RS2OOO said:

poseidon1 said:

RS2OOO said:

Hi all,

I'm a rare poster as the answers I need are usually easy to find on here, but some extra clarification on this would put my mind at rest.

Mum died last summer, and had let out her home whilst battling cancer.

Probate's granted and as executor I'd like to tie in reporting the simple estate with the tax year end and simaultaniously distributing the estate to beneficiaries.

4 Months after death Mum's 2 year fixed rate savings bond matured, circa £1000 interest.
Does it matter that technically 20 Months of that interest was earned while she was alive (and would have been tax free), or do I report the full £1000 ?

Since death we've also earned around £10 in shares dividends which I shall report.

Finally, by end of March I'll have received about £10,000 in rental income from her home, but I have paid out around £3000 in repairs and maintenance.
Do I report £10,000 or £7000 as the income?

The lack of clarity comes from HMRCs wording which doesn't make it fool proof as to whether you should report income before or after expenses:

"a year by year breakdown of any income and capital gains for the whole administration period"


My thinking is that I should report as follows:
Savings interest: £1000
Dividends from shares: £10
Property rental income: £7000

Thanks in advance for any help.

For clarity, the informal tax reporting system can only be triggered if all aspects of the estate administration has been completed - guidance below

https://www.gov.uk/probate-estate/reporting-the-estate

In your case, assuming the estate property is still generating rent being collected by the executors and no attempt has yet been made to remove the property from the executor's ownership by way of an Assent in favour of the beneficiaries entitled to the property ( or sale ), then the estate administration remains ongoing. You will not have met the criteria for a final reporting of the entire tax payable by the estate for ' the whole of the administration period'.

So what is the current position with regard to the property and what are the executors intentions in dealing with it going forward ( sale or retain in the ownership of beneficiaries?).

As for the taxable income you quoted, the net rent was stated  as up to March 2025, so do the  interest and dividend  numbers solely relate to the period to 5 April 2025 ( ie the 2024/25) tax year? What is the quantum of estate income (if any) received so far for the current tax year?

Hi,
The year I wish to report on is 2025 to 2026 - From date of death last summer to 31st March 2026 when I'd like to finalise distribution of the estate. (Tax return already filed and tax paid for the deceased up to date of death).

The Executors are the Beneficiaries of the let property, we are working through forms ID1, AS1 and AP1 to transfer the title. Everything else has already been distributed.

Then you can if you wish use the informal letter approach rather than a formal SA 900 estate tax return.

Seems you would be reporting with appropriate explanatory narratives:

Interest £1000 @ 20%
Dividend £10 @ 8.75%
Net rents £7000 @ 20 %

However, please note we have heard anecdotal stories of there being a large backlog of these informal returns piled up with HMRC waiting to be dealt with, so could be some time before you get a response.

https://www.pie.tax/tax-pible/delayed-hmrc-processing-times-2026-what-you-need-to-know

Also don't overlook your responsibility to issue the residual beneficiaries with R185 ( estate) forms for them to report ( if needed) their defacto shares of the estate net income  in due course- see below

https://assets.publishing.service.gov.uk/media/65e5aeb57bc329e58db8c1b9/R185Estate-Income.pdf

RS2OOO

poseidon1 said:

RS2OOO said:

poseidon1 said:

RS2OOO said:

Hi all,

I'm a rare poster as the answers I need are usually easy to find on here, but some extra clarification on this would put my mind at rest.

Mum died last summer, and had let out her home whilst battling cancer.

Probate's granted and as executor I'd like to tie in reporting the simple estate with the tax year end and simaultaniously distributing the estate to beneficiaries.

4 Months after death Mum's 2 year fixed rate savings bond matured, circa £1000 interest.
Does it matter that technically 20 Months of that interest was earned while she was alive (and would have been tax free), or do I report the full £1000 ?

Since death we've also earned around £10 in shares dividends which I shall report.

Finally, by end of March I'll have received about £10,000 in rental income from her home, but I have paid out around £3000 in repairs and maintenance.
Do I report £10,000 or £7000 as the income?

The lack of clarity comes from HMRCs wording which doesn't make it fool proof as to whether you should report income before or after expenses:

"a year by year breakdown of any income and capital gains for the whole administration period"


My thinking is that I should report as follows:
Savings interest: £1000
Dividends from shares: £10
Property rental income: £7000

Thanks in advance for any help.

For clarity, the informal tax reporting system can only be triggered if all aspects of the estate administration has been completed - guidance below

https://www.gov.uk/probate-estate/reporting-the-estate

In your case, assuming the estate property is still generating rent being collected by the executors and no attempt has yet been made to remove the property from the executor's ownership by way of an Assent in favour of the beneficiaries entitled to the property ( or sale ), then the estate administration remains ongoing. You will not have met the criteria for a final reporting of the entire tax payable by the estate for ' the whole of the administration period'.

So what is the current position with regard to the property and what are the executors intentions in dealing with it going forward ( sale or retain in the ownership of beneficiaries?).

As for the taxable income you quoted, the net rent was stated  as up to March 2025, so do the  interest and dividend  numbers solely relate to the period to 5 April 2025 ( ie the 2024/25) tax year? What is the quantum of estate income (if any) received so far for the current tax year?

Hi,
The year I wish to report on is 2025 to 2026 - From date of death last summer to 31st March 2026 when I'd like to finalise distribution of the estate. (Tax return already filed and tax paid for the deceased up to date of death).

The Executors are the Beneficiaries of the let property, we are working through forms ID1, AS1 and AP1 to transfer the title. Everything else has already been distributed.

Then you can if you wish use the informal letter approach rather than a formal SA 900 estate tax return.

Seems you would be reporting with appropriate explanatory narratives:

Interest £1000 @ 20%
Dividend £10 @ 8.75%
Net rents £7000 @ 20 %

However, please note we have heard anecdotal stories of there being a large backlog of these informal returns piled up with HMRC waiting to be dealt with, so could be some time before you get a response.

https://www.pie.tax/tax-pible/delayed-hmrc-processing-times-2026-what-you-need-to-know

Also don't overlook your responsibility to issue the residual beneficiaries with R185 ( estate) forms for them to report ( if needed) their defacto shares of the estate net income  in due course- see below

https://assets.publishing.service.gov.uk/media/65e5aeb57bc329e58db8c1b9/R185Estate-Income.pdf

Ah, thank you for this. This is what I had hoped for as the simplest way to report.

I guess it can't hurt to write the letter after 31st March and see what response I (eventually) get.

As an aside, 70 days for a response to my last letter requesting a UTR for the deceased, then they asked for the original LPA as evidence, I phoned and said, "really?, surely Death Certificate is what you need", they said no, definitely LPA, so I sent that and waited another Month for them to write back saying; "Its the Death Certificate we need".

I've not delved much into the R185 process yet, but guessing as a higher rate beneficiary I'll have to pay extra tax, and the other non-tax payer beneficiary will be in a position to claim tax back. Anyway, that's a future concern.

Your help is appreciated.

poseidon1

RS2OOO said:

poseidon1 said:

RS2OOO said:

poseidon1 said:

RS2OOO said:

Hi all,

I'm a rare poster as the answers I need are usually easy to find on here, but some extra clarification on this would put my mind at rest.

Mum died last summer, and had let out her home whilst battling cancer.

Probate's granted and as executor I'd like to tie in reporting the simple estate with the tax year end and simaultaniously distributing the estate to beneficiaries.

4 Months after death Mum's 2 year fixed rate savings bond matured, circa £1000 interest.
Does it matter that technically 20 Months of that interest was earned while she was alive (and would have been tax free), or do I report the full £1000 ?

Since death we've also earned around £10 in shares dividends which I shall report.

Finally, by end of March I'll have received about £10,000 in rental income from her home, but I have paid out around £3000 in repairs and maintenance.
Do I report £10,000 or £7000 as the income?

The lack of clarity comes from HMRCs wording which doesn't make it fool proof as to whether you should report income before or after expenses:

"a year by year breakdown of any income and capital gains for the whole administration period"


My thinking is that I should report as follows:
Savings interest: £1000
Dividends from shares: £10
Property rental income: £7000

Thanks in advance for any help.

For clarity, the informal tax reporting system can only be triggered if all aspects of the estate administration has been completed - guidance below

https://www.gov.uk/probate-estate/reporting-the-estate

In your case, assuming the estate property is still generating rent being collected by the executors and no attempt has yet been made to remove the property from the executor's ownership by way of an Assent in favour of the beneficiaries entitled to the property ( or sale ), then the estate administration remains ongoing. You will not have met the criteria for a final reporting of the entire tax payable by the estate for ' the whole of the administration period'.

So what is the current position with regard to the property and what are the executors intentions in dealing with it going forward ( sale or retain in the ownership of beneficiaries?).

As for the taxable income you quoted, the net rent was stated  as up to March 2025, so do the  interest and dividend  numbers solely relate to the period to 5 April 2025 ( ie the 2024/25) tax year? What is the quantum of estate income (if any) received so far for the current tax year?

Hi,
The year I wish to report on is 2025 to 2026 - From date of death last summer to 31st March 2026 when I'd like to finalise distribution of the estate. (Tax return already filed and tax paid for the deceased up to date of death).

The Executors are the Beneficiaries of the let property, we are working through forms ID1, AS1 and AP1 to transfer the title. Everything else has already been distributed.

Then you can if you wish use the informal letter approach rather than a formal SA 900 estate tax return.

Seems you would be reporting with appropriate explanatory narratives:

Interest £1000 @ 20%
Dividend £10 @ 8.75%
Net rents £7000 @ 20 %

However, please note we have heard anecdotal stories of there being a large backlog of these informal returns piled up with HMRC waiting to be dealt with, so could be some time before you get a response.

https://www.pie.tax/tax-pible/delayed-hmrc-processing-times-2026-what-you-need-to-know

Also don't overlook your responsibility to issue the residual beneficiaries with R185 ( estate) forms for them to report ( if needed) their defacto shares of the estate net income  in due course- see below

https://assets.publishing.service.gov.uk/media/65e5aeb57bc329e58db8c1b9/R185Estate-Income.pdf

Ah, thank you for this. This is what I had hoped for as the simplest way to report.

I guess it can't hurt to write the letter after 31st March and see what response I (eventually) get.

As an aside, 70 days for a response to my last letter requesting a UTR for the deceased, then they asked for the original LPA as evidence, I phoned and said, "really?, surely Death Certificate is what you need", they said no, definitely LPA, so I sent that and waited another Month for them to write back saying; "Its the Death Certificate we need".

I've not delved much into the R185 process yet, but guessing as a higher rate beneficiary I'll have to pay extra tax, and the other non-tax payer beneficiary will be in a position to claim tax back. Anyway, that's a future concern.

Your help is appreciated.

If using the informal process, no need to wait you can proceed immediately since as far as you are concerned the estate administration is substantially complete, subject to settling the small outstanding income tax due.

Given the HMRC backlog, I would want my informal return in  their in-tray sooner rather than later.

RS2OOO

poseidon1 said:

RS2OOO said:

poseidon1 said:

RS2OOO said:

poseidon1 said:

RS2OOO said:

Hi all,

I'm a rare poster as the answers I need are usually easy to find on here, but some extra clarification on this would put my mind at rest.

Mum died last summer, and had let out her home whilst battling cancer.

Probate's granted and as executor I'd like to tie in reporting the simple estate with the tax year end and simaultaniously distributing the estate to beneficiaries.

4 Months after death Mum's 2 year fixed rate savings bond matured, circa £1000 interest.
Does it matter that technically 20 Months of that interest was earned while she was alive (and would have been tax free), or do I report the full £1000 ?

Since death we've also earned around £10 in shares dividends which I shall report.

Finally, by end of March I'll have received about £10,000 in rental income from her home, but I have paid out around £3000 in repairs and maintenance.
Do I report £10,000 or £7000 as the income?

The lack of clarity comes from HMRCs wording which doesn't make it fool proof as to whether you should report income before or after expenses:

"a year by year breakdown of any income and capital gains for the whole administration period"


My thinking is that I should report as follows:
Savings interest: £1000
Dividends from shares: £10
Property rental income: £7000

Thanks in advance for any help.

For clarity, the informal tax reporting system can only be triggered if all aspects of the estate administration has been completed - guidance below

https://www.gov.uk/probate-estate/reporting-the-estate

In your case, assuming the estate property is still generating rent being collected by the executors and no attempt has yet been made to remove the property from the executor's ownership by way of an Assent in favour of the beneficiaries entitled to the property ( or sale ), then the estate administration remains ongoing. You will not have met the criteria for a final reporting of the entire tax payable by the estate for ' the whole of the administration period'.

So what is the current position with regard to the property and what are the executors intentions in dealing with it going forward ( sale or retain in the ownership of beneficiaries?).

As for the taxable income you quoted, the net rent was stated  as up to March 2025, so do the  interest and dividend  numbers solely relate to the period to 5 April 2025 ( ie the 2024/25) tax year? What is the quantum of estate income (if any) received so far for the current tax year?

Hi,
The year I wish to report on is 2025 to 2026 - From date of death last summer to 31st March 2026 when I'd like to finalise distribution of the estate. (Tax return already filed and tax paid for the deceased up to date of death).

The Executors are the Beneficiaries of the let property, we are working through forms ID1, AS1 and AP1 to transfer the title. Everything else has already been distributed.

Then you can if you wish use the informal letter approach rather than a formal SA 900 estate tax return.

Seems you would be reporting with appropriate explanatory narratives:

Interest £1000 @ 20%
Dividend £10 @ 8.75%
Net rents £7000 @ 20 %

However, please note we have heard anecdotal stories of there being a large backlog of these informal returns piled up with HMRC waiting to be dealt with, so could be some time before you get a response.

https://www.pie.tax/tax-pible/delayed-hmrc-processing-times-2026-what-you-need-to-know

Also don't overlook your responsibility to issue the residual beneficiaries with R185 ( estate) forms for them to report ( if needed) their defacto shares of the estate net income  in due course- see below

https://assets.publishing.service.gov.uk/media/65e5aeb57bc329e58db8c1b9/R185Estate-Income.pdf

Ah, thank you for this. This is what I had hoped for as the simplest way to report.

I guess it can't hurt to write the letter after 31st March and see what response I (eventually) get.

As an aside, 70 days for a response to my last letter requesting a UTR for the deceased, then they asked for the original LPA as evidence, I phoned and said, "really?, surely Death Certificate is what you need", they said no, definitely LPA, so I sent that and waited another Month for them to write back saying; "Its the Death Certificate we need".

I've not delved much into the R185 process yet, but guessing as a higher rate beneficiary I'll have to pay extra tax, and the other non-tax payer beneficiary will be in a position to claim tax back. Anyway, that's a future concern.

Your help is appreciated.

If using the informal process, no need to wait you can proceed immediately since as far as you are concerned the estate administration is substantially complete, subject to settling the small outstanding income tax due.

Given the HMRC backlog, I would want my informal return in  their in-tray sooner rather than later.

I'll wait tilll end of tax year as I don't currently do SA.
Otherwise (as a beneficiary and with more rent to come), I'll have to file a personal return just to cover Feb & March rental income in the current year. 
Assuming I've got it right, I want to file for the estate up to 31st March, then SA for myself for the 2026-2027 year.