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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: VAT: effects of death or incapacity on recovery action: death of a partner

When a partner dies, his share of the partnership assets forms part of his estate. The estate is liable for any debts of the partnership to the extent for which the deceased partner was liable. Partnership creditors are paid after the partner’s personal creditors are paid.

Recovery action is not appropriate generally. A claim should be lodged against the partner’s estate.

We may take recovery action against the surviving partners in relation to the partnership debts for which they are liable. Action must be reasonable and proportionate in the circumstances. Give careful consideration to any request for time to pay.