TSEM7418 - Deceased persons: administration periods: returns: clearance procedure

Background

When the administration period comes or is coming to an end and HMRC needs a tax return from the personal representatives covering the final period to cessation, we will usually issue a Notice to file a return after the end of the tax year in which the cessation occurred. Under Self Assessment, however, HMRC can enquire into a tax return within a specified time.

The time allowed for enquiries is up to 12 months after the day on which the return was delivered provided, the return is received on or before the statutory filing date. This could mean that if the administration period ended on say, 10 April 2023 the personal representatives could not be sure, until 12 months after they filed a return, whether HMRC were going to enquire into the return for the period to cessation. In this example the return could be filed at any time from 11 April 2023 to 31 January 2025, so the personal representatives would not be sure of their position until a date between 11 April 2023 and 31 January 2026.

Procedure - return

To help personal representatives settle the tax affairs of the administration period quickly HMRC will, accept a tax return before the end of the tax year in which cessation occurred.

This practice is not statutory. 

Procedure - clearance

Whether the tax return is delivered to HMRC before or after the end of that tax year, HMRC will, if requested, give early written confirmation that we do not intend to enquire into that return.

This confirmation does not preclude, in exceptional circumstances, HMRC enquiring into the tax return at a later date if we discover that the return was incomplete or incorrect. But in most cases, receipt of this written confirmation will signify the end of HMRC’s interest in the income and capital gains tax affairs of the administration period and, where that is the only open matter, will enable the personal representatives to finalise tax liabilities and distribute the estate.

This practice is not statutory.