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R185

edited 30 November -1 at 1:00AM in Deaths, Funerals & Probate
3 replies 578 views
buffalitobuffalito Forumite
10 posts
First Post
MoneySaving Newbie
edited 30 November -1 at 1:00AM in Deaths, Funerals & Probate
Is an R185 form only necessary for the beneficiaries when there is income from the estate that has been paid out to them in a tax year? So if no payments of income have been made no R185 is needed?

Are payments from capital ok? Probate has been granted and an estate tax return completed. Tax has been agreed and will be paid on the income to the estate.

TIA

Replies

  • Tom99Tom99 Forumite
    5.4K posts
    1,000 Posts Second Anniversary
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    buffalito wrote: »
    Is an R185 form only necessary for the beneficiaries when there is income from the estate that has been paid out to them in a tax year? So if no payments of income have been made no R185 is needed?

    Are payments from capital ok? Probate has been granted and an estate tax return completed. Tax has been agreed and will be paid on the income to the estate.

    TIA
    Yes that's my understanding. Estates are allowed £500 of savings income tax free per tax year providing that is the only income. In which case R185 would appear unnecessary.

    'Please note that under an 'interim arrangement', at least for the tax years 2016/17 to 2020/21, executors and personal representatives dealing with estates in administration do not need to report income, pay tax or otherwise do anything for HMRC whatsoever where:
    • the only source of income is savings interest; and
    • the tax liability is below £100.'
  • buffalitobuffalito Forumite
    10 posts
    First Post
    MoneySaving Newbie
    There is rental, dividend and interest income but no income payments have been made to the beneficiaries so no R185 needed if I've understood correctly?
  • Tom99Tom99 Forumite
    5.4K posts
    1,000 Posts Second Anniversary
    ✭✭✭✭
    buffalito wrote: »
    There is rental, dividend and interest income but no income payments have been made to the beneficiaries so no R185 needed if I've understood correctly?
    In which case the estate needs to pay tax on all of that income since the estate does not have any tax free allowance. 20% on the savings and rental income and 7.5% on the dividend income. When you distribute what's left after you have paid the tax due you would give the beneficiaries the R185.
    https://www.litrg.org.uk/tax-guides/bereavement/how-estate-taxed-during-administration
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