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HMRC internal manual

Self Assessment Manual

From
HM Revenue & Customs
Updated
, see all updates

Interest, penalties and surcharge: penalties: fixed automatic penalties: deceased cases

This guidance refers to tax returns received for 2009-10 and earlier. For further information regarding the new rules for the tax years 2010-11 and later, see SAM61200 onwards.

Taxpayer dies before the filing date

Where a taxpayer who has been served with a notice to file a return fails to comply and dies before the filing date then you should cancel any penalty subsequently imposed under Sections 93 or 93A TMA 1970.

This is because we cannot show that the person on whom the notice was served has incurred any penalty because he / she died before it became due.

When notified of the death of the taxpayer

  • Update the SA record with the appropriate details
  • Cancel the penalty using function AMEND FIXED PENALTIES
  • Issue a new return to the named personal representatives
  • Record the date of issue of the return on the SA record

For fuller details of the action to take see subject ‘Permanent Cessation (SAM110170)

The filing date of the new return will be the later of

  • 31 October following the end of the return year

And

  • 3 months and 7 days from the date of issue

Any fixed automatic penalties will be based on the revised filing date. If the return is still not filed and penalties become due see subject ‘Fixed Automatic Penalty Record: Amending the’.

You should take care not to ‘cancel’ any reapplied penalty before it is actually on record.

Taxpayer dies after the filing date

Where the taxpayer dies shortly after the filing date then any penalty imposed would be valid but an appeal from the named personal representatives would normally be accepted and the penalty cancelled. Do not cancel the penalty without an appeal.

You should

  • Cancel the penalty using function AMEND FIXED PENALTIES
  • Issue a new return to the named personal representatives
  • Record the date of issue on the SA record

For fuller details of the action to take see subject ‘Permanent Cessation (SAM110170)

  • 31 October following the end of the return year

And

  • 3 months and 7 days from the date of issue

Any fixed automatic penalties will be based on the revised filing date. If the return is still not filed and penalties become due see subject ‘Fixed Automatic Penalty Record: Amending the’ (SAM61030).

Note that the record will not be updated immediately - the penalty will be raised and the notice issued in the next batch run (usually monthly). You should take care not to ‘cancel’ any reapplied penalty before it is actually on record.