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HMRC internal manual

Inheritance Tax Manual

Liabilities: investigating liabilities: estimated income tax liabilities

In most cases you should accept deductions for estimated tax liabilities without further question. There is normally no need to raise enquiries asking the taxpayers to let us know when the liability has been finalised.

But where the sums involved are large you should look at what information you have about the deceased and the estate in broadly the same way as you do for other large income tax liabilities (IHTM28151). For example, you may consider that an estimated income tax liability of, £5,000 may be realistic in a large estate with substantial income producing assets and on this basis would not raise any further enquiries about the estimated liability. On the other hand you might not accept the same estimated liability in an estate of similar size where there are little or no income yielding assets. In this case you might also ask questions about how the liability arose.

If the tax liability relates to a life insurance policy you should read the instructions at IHTM28160.