New ATT guide looks at income tax matters for deceased estates
UPDATE: 22 July 2024 - the guide has been further updated to explain that details of the personal representative can be corrected either by amending the original Tell Us Once notification or by submitting a P1000. The latter approach is advised by HMRC.
The ATT has produced a new guide for members who are dealing with the income tax affairs of an estate of a deceased individual.
The ATT has been part of a working group with HMRC looking at how aspects of the process of estate administration could be improved for taxpayers and agents. Based on some of the discussions in this group, this guide pulls together what we have learned about the income tax aspects of dealing with an estate.
The guide was first published at the start of July, but has already been updated to reflect a recent change to HMRC’s preferred agent authorisation route and to clarify an issue members were having with repayments.
New route for agent authorisation
When a client dies, any existing authority is cancelled. If their agent is instructed by the executors to act for the estate and/or finalise any pre-death affairs, then fresh authorisation is required. We learned some time ago that HMRC would prefer agents to use a P1000, rather than the 64-8 form and we have been encouraging HMRC to make this form more accessible. We are pleased to report that as of 12 July, the P1000 is now available to download from GOV.UK.
From HMRC’s perspective, the P1000 is a more helpful form as it includes details of the personal representatives. We would encourage members to submit this form, instead of the 64-8, to obtain authority to speak to HMRC about an estate.
Obtaining repayments for an estate
Earlier this year, we received a number of reports from members concerned that any refunds of income tax were not being paid to the correct person, with HMRC insisting that refunds should be going to the person who completed the Tell Us Once service, rather than the actual personal representatives with responsibility for the estate.
We raised these concerns with HMRC to see if we could establish where the issue/confusion was arising. They confirmed that the default position is that whoever completes the Tell Us Once process will be recorded as the personal representative. If it is later found that they are not a personal representative, then an amendment either needs to be made to the original Tell Us Once Notification, or a P1000 submitted with the correct details of the personal representatives. [Bold text amended 22 July 2024.]
We would be interested to hear from members whether this helps to resolve the issues they are experiencing.
We will continue to update the guide as new information or queries come to us. Comments or corrections would be most welcome from members – please email [email protected].