How to file a tax return for a deceased person

When someone dies, their taxes do not die with them. If you are the executor or administrator of the estate, knowing what to do – and when to do it – can spare you and the estate from long-term consequences.

This article gives you practical experience that will help you manage the process with a minimum of additional stress and anxiety.

Step 1: Seek Help From a Tax Office

Whenever possible, and as soon as possible, you should contact the deceased person’s tax office. They will let you know what you need to do and can send you the necessary forms. If you don’t know, or can’t locate the deceased’s nearest tax office, contact your nearest tax office or HM Revenue & Customs (HMRC) Enquire Centre. You will need to provide the deceased person’s:

• Name

• Address

• National Insurance Number (if possible)

Step 2: Complete the Appropriate Forms

These forms are used to calculate whether any tax is owed or a rebate is due. It must be signed by the executor or administrator.

Form R27

To complete this form, you will need to know information about the deceased person’s income, including:

• Paid employment

• State and other pensions

• Annuities

• Benefits

• Bank and building society interest

• Other taxable income, like rent from property

• UK dividends and tax credits

If the person paid tax through PAYE, their tax office will send you form R27 “Potential repayment to the estate” to complete. This form can also be downloaded as a .pdf file.

If the person paid tax through self-assessment, you can opt to complete form R27 in full – or only in part – and then complete a self-assessment tax return immediately or at the end of the tax year.

Self-Assessment Tax Form

In addition to the information needed to complete Form R27, you will also need to answer questions about the deceased person’s:

• Capital gains

• Outstanding student loans

• Payments qualifying for tax relief

Form R40

This is a special form for claiming a repayment of tax deducted from savings and investments.

Step 3: File On Time

The deadlines are as follows:

• 31 January after the end of the year to which it relates.

• Three months and seven days after its issue date

Other considerations:

• Contact bank and building societies as soon as possible to ensure interest paid after the date of death is properly accounted for and categorized.

• The deceased person will get their full tax-free personal allowance for the year of their death.

• They will also get a full year’s entitlement to any blind person’s or married couple’s allowance for the full year if those allowances applied when they were alive.

• If the deceased was employed, no national insurance considerations are payable on any earnings paid by their employer after the date of their death.

• If they were self-employed, you will need to contact the National Insurance Contributions Office to ensure existing direct debit or other arrangements for collecting their Class 2 national insurance contributions are cancelled.

• The estate may have to pay Capital Gains Tax (CGT) on behalf of the estate if money is made from selling their capital assets to include property or possessions during the course of the administration period.

• Ask HMRC how you should declare gains that may be liable to CGT. It may not be necessary to fill in a self-assessment form if the deceased didn’t usually find one.

• The executor or administrator is responsible for ensuring Inheritance Tax is paid.

Coping with the loss of a loved one presents  its own challenges. During this time, you may want to consider asking a question. We’ll treat your questions with sensitivity and respect.

2 comments

  1. Mrs M A Buddery says:

    As I Have mislaid the pre-paid envelope sent with
    Form 27 – Potential repayment to the estate – could you please send me another envelope or Email the address to whom it should be sent. I have completed the Form 27 and it now needs posting.

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