Deceased persons: conditions for informal payment procedures
Personal representatives may make an informal payment of the total liability for the whole period of administering the deceased’s estate if certain conditions are met. The main condition is that the total tax liability (income tax plus capital gains tax) for the entire administration period is less than £10,000. The other conditions are that
- the probate/confirmation value of the estate is less than £2.5m, and
- the proceeds of assets sold by the personal representative in any one tax year are less than £250,000 for deaths up to 6 April 2016, or
- the proceeds of assets sold in any one tax year are less than £500,000 for deaths on or after 6 April 2016, or
- the estate is not regarded as complex, so it can be dealt with without the personal representatives having to complete a Self Assessment return.
An informal payment may not be accepted where any part of the payment relates to:
- tax on payments within ITA/S946 or
- a recovery of tax overpaid under Section 30 TMA 1970, or
- the recovery of excessive tax credits under Section 252 ICTA 1988.
Where a trust is created under the terms of the deceased’s will or the rules of intestacy, responsibility for dealing with the administration period liability should be passed to HMRC Administration of Estates Cardiff (TSEM1421).
Provided that the conditions referred to above are met, the personal representatives may make an informal payment of the total liability for the whole period of administering the deceased’s estate.
SA return issued
Informal payments may not be accepted where a Trust and Estate Self Assessment tax return has been issued to the personal representatives. In such circumstances, the personal representatives are under an obligation to complete and send back the tax return. But if it is necessary to issue a Trust and Estate Self Assessment tax return this should usually only be issued by HMRC Adnibistration of Estates Cardiff (subject to the conditions in TSEM7406).