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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Assessing Time Limits: Personal representatives of deceased persons

Following a person’s death, you may need to assess the personal representatives to income tax, capital gains tax, VAT, stamp duty land tax, aggregates levy, climate change levy landfill tax or excise duty for

  • the deceased’s liability for relevant tax periods, see CH51700, up to and including the date of death, and
  • the deceased’s estate for periods from the date of death.

The time limits described in CH51300 apply when assessing the personal representatives in respect of the deceased’s estate for periods after the person’s date of death.

Special rules apply to determine the time limits that apply for assessments on the personal representatives for periods prior to the date of death. They are different for

Income tax and capital gains tax

  1. Any assessment of the deceased’s liability for periods up to and including the date of death must be made within 4 years of the end of the year of assessment in which the person died.

For example

Andrew died on 19 November 2010 and we need to assess his personal representatives in respect of a sum arising for the period prior to death. The end of the year of assessment in which Andrew died is 5 April 2011 so any assessment must be made by 5 April 2015.
  1. Any assessment on the personal representatives to recover any tax lost as a result of
* the careless or deliberate behaviour of the deceased (or another person acting on behalf of the deceased whilst they were alive), or
* the failure of the deceased to notify chargeability to income tax and capital gains tax

may only be made for a year of assessment that ended not earlier than 6 years prior to the date of death.

For example

Mary died on 23 June 2010 and you discover that tax has been lost for the previous 10 years as a result of her deliberate failure to return all sources of income. You can only make assessments for the years 2004-05 to 2009-10 and they must be made before 5 April 2015.

VAT

  1. Any assessment to VAT for a prescribed accounting period must be made within 4 years after a person’s death.

For example

Chris dies on 15 April 2010. Any assessment to VAT must be made by 14 April 2014.
  1. Any assessment on the personal representatives to recover VAT lost as a result of
* the deliberate behaviour of the deceased (or another person acting on behalf of the deceased whilst they were alive), or
* because the deceased failed to notify liability to register for VAT or any acquisition from the EU, or
* failed to disclose a notifiable arrangement or scheme

may be made in respect of prescribed accounting periods falling within 20 years prior to the date of death. All such assessments must be made within 4 years of the date of death.

For example

Betty dies on 30 November 2010 and you establish that she deliberately failed to make returns and account for the correct amount of VAT for the past 12 years. You may make assessments for all 12 years. The assessments must be made by 29 November 2014.

Remember, that all VAT tax assessments made more than 2 years after the end of the prescribed accounting period are subject to the 12 months evidence of facts rule, see CH51820. There are transitional provisions for assessments made under

  • the normal 4-year time limit in the period 1 April 2009 to 31 March 2010, see CH51520, and
  • the extended 20-year time limit that relates to a relevant tax period ending on or before 31 March 2010, see CH51530.