Home > Financial Issues > Tax Affairs After a Death

Tax Affairs After a Death

By: Beth Morrisey MLIS - Updated: 28 May 2017 | comments*Discuss
 
Death tax inheritance Tax capital

When someone dies part of wrapping up his or her affairs involves settling the taxes on his or her estate and notifying the proper tax authorities of the death. To do this it is important to contact the deceased’s local tax office as soon as possible. If this office is unknown, the executor or administrator of the estate can contact his or her own tax office and explain the situation with details of the deceased’s name, address and National Insurance number, if it is known. Alternatively, contacting an HRMC (HM Revenue and Customs) Enquiry Centre is also an option. Once contact has been made with one of these offices, a representative will explain what must been done next and which tax forms must be completed.

Necessary Information

In addition to knowing the deceased’s name, address and National Insurance number there are other pieces of information that may help the executor or administrator of an estate as (s)he wades through tax affairs after a death. Such information would include:

  • The deceased’s date and possibly place of birth.
  • The deceased’s marital and parental status.
  • The deceased’s employment status (employed, self-employed, unemployed, retired, etc.).
  • Details of the deceased’s income.
  • Details of other earned or taxable income (such as from renting out property).
  • Details of public and/or private pensions.
  • Benefits that the deceased was receiving.
  • Interest earned on current, savings or building society accounts.
  • Any other assets held by the deceased.
  • Any outstanding debts owed by the deceased.

      Notifying Institutions of a Death

      In the course of dealing with tax affairs after a death it will become necessary to notify related institutions as well. Any banks or building societies with which the deceased kept an account should be notified so that accounts can be readied for closure and interest paid on the accounts will terminate in the correct fashion. If the deceased also had assets with private companies such as stockbrokers, for example, then they would need to be notified as well. Government offices from which the deceased received benefits, the National Insurance Contributions Office (if the deceased was self-employed), the deceased’s employer and any entity from which the deceased was drawing a private pension should also be notified. As a general rule of thumb, if the deceased had financial arrangements with an entity at the time of his or her death, that institution should be notified.

      Taxes Relating to a Death

      While every circumstance will be different, two taxes that are often involved in the settlement of an estate include Capital Gains Tax and Inheritance Tax. Capital Gains Tax may be payable if money is made from selling parts of the estate, such as property, at a higher price than the current market value. Inheritance Tax may be payable is the value of the estate is above a certain limit. Because the circumstances of every estate will be different, it is highly advisable that an experienced specialist such as a solicitor and/or accountant be consulted about each matter.

      Tax affairs after a death can become confusing and involved processes. While local tax offices and HMRC Enquiry Centres are available to help, they can not complete the process for you. If you require further information on taxes affairs after a death, consider consulting a solicitor and possibly an accountant who will guide you through the process.

      You might also like...
      Share Your Story, Join the Discussion or Seek Advice..
      Sarah - Your Question:
      Whoops, my post should read sold for £175,000 and solicitor took £20,000. I did contact an ombudsman who asked me to contact the solicitor. The solicitor replied very haughtily. The ombudsman suggested I wait until the beneficiaries receive payments and if not happy contact them again. I am beginning to wonder if this solicitor will ever make any payments. Is there any time limit? Thank you for any advice.

      Our Response:
      Ha ha sorry we'd already replied! No there's no real time limit, sometimes these things do take years. Follow the Ombudsman's advice for now. It might be worth asking another solicitor (from a different firm) to look into it.
      FacingBereavement - 30-May-17 @ 2:47 PM
      Sarah - Your Question:
      My second cousin died 5 years ago. We believed she only had a handful of relatives. She was not married and had no children. She had no visitors. We could not find a will so my sister visited a solicitor who took the case on. A family tree was done and about a year later 52 distant relatives were traced! Each received a letter from the solicitor asking them to confirm they were the correct person and that were a possible beneficiary. 5 years later the house was sold by the solicitor for £175. The solicitor has taken about £20 in fees. The beneficiaries have not received anything yet. The solicitor says this is because he needs to take out an indemnity insurance in case someone comes forward at a later date to make a claim. We asked how long would this take and he said how long is a piece of string? I don't know if interest is being added to the estate. It seems an awful long time to find indemnity policy. Does this sound right?

      Our Response:
      It might be worth make enquiries at the law society etc. Selling a house for £175 certainly doesn't sound right.
      FacingBereavement - 30-May-17 @ 2:46 PM
      Whoops, my post should read sold for £175,000 and solicitor took £20,000. I did contact an ombudsman who asked me to contact the solicitor. The solicitor replied very haughtily. The ombudsman suggested I wait until the beneficiaries receive payments and if not happy contact them again.I am beginning to wonder if this solicitor will ever make any payments.Is there any time limit? Thank you for any advice.
      Sarah - 28-May-17 @ 5:01 PM
      My second cousin died 5 years ago.We believed she only had a handful of relatives. She was not married and had no children. She had no visitors. We could not find a will so my sister visited a solicitor who took the case on.A family tree was done and about a year later 52 distant relatives were traced! Each received a letter from the solicitor asking them to confirm they were the correct person and that were a possible beneficiary. 5 years later the house was sold by the solicitor for £175. The solicitor has taken about £20 in fees. The beneficiaries have not received anything yet. The solicitor says this is because he needs to take out an indemnity insurance in case someone comes forward at a later date to make a claim.We asked how long would this take and he said how long is a piece of string?I don't know if interest is being added to the estate.It seems an awful long time to find indemnity policy. Does this sound right?
      Sarah - 28-May-17 @ 4:54 PM
      Mum and dad owned a house but were not married.Mum died first and left her half of the house to me, they had tendency in common, it was left to her estate and I am the only beneficiary.We had the house valued at the time and I paid inheritance tax on her half.Dad has now died several years later, his half of the house is left to me too, with his half of the house I will not need to pay inheritance tac as it does not exceed the allowed amount.My question is.....if my mothers hslf had increased in value, which if has will I be liable for any taxes, I.e. Capital gains tax.I have choice in selling the house as my dad lived in it and I wasn't able to sell fir this reason.
      Smithypj - 8-Jan-17 @ 12:31 AM
      My dad has just died at aged 66. His wife is 51 and has a 19 yr old son in education. She will be entitled to claim a Widows parents Allowance to live off for the next year but she has a £3000 funeral bill to pay and no means by which to do so. The benefits office have advised her that as dad was over 65 she can't claim a Bereavment Payment and because she has a dependent she can't claim a funeral grant. Apparently there are no other options. I don't know what I can do to help, any suggestions?
      Sjb1812 - 9-Oct-15 @ 7:07 PM
      Share Your Story, Join the Discussion or Seek Advice...
      Title:
      (never shown)
      Firstname:
      (never shown)
      Surname:
      (never shown)
      Email:
      (never shown)
      Nickname:
      (shown)
      Comment:
      Validate:
      Enter word:
Latest Comments
  • Jac
    Re: Questionnaire: Do You Need Bereavement Counselling?
    Hi. My mum got diagnosed sept 12th 2016 Acute myeloid leukaemia passed away 10th July 2017..im heart…
    22 November 2017
  • FacingBereavement
    Re: How Grief Affects Your Relationships
    Neil - Your Question:5 years ago my father passed away due to his long standing alcohol addiction it's something I have…
    22 November 2017
  • Steve
    Re: Inheriting Property
    Ny wifes mother left her and her sister the house. The will states that her unmarried partner is allowed to live in the house until he dies.…
    21 November 2017
  • FacingBereavement
    Re: What if There is No Will?
    ks - Your Question:Hi Im divorced for over 10 yrs, but I have children with my ex, he is living with someone else, but concerned his…
    21 November 2017
  • FacingBereavement
    Re: Coping with Multiple Deaths
    Sprout - Your Question:My only brother shot and killed my twin 16 Year old Nieces 4-days before their 17th, Birthday and then shot…
    20 November 2017
  • Sprout
    Re: Coping with Multiple Deaths
    My only brother shot and killed my twin 16 Year old Nieces 4-days before their 17th, Birthday and then shot and killed himself. One…
    19 November 2017
  • Anie
    Re: What if There is No Will?
    My dad who was a loner was diagnosed with dementia 1 1/2 years ago, my sister who didn't talk to him for years quickly took over POA…
    18 November 2017
  • Neil
    Re: How Grief Affects Your Relationships
    5 years ago my father passed away due to his long standing alcohol addiction it's something I have dealt with my whole…
    18 November 2017
  • FacingBereavement
    Re: What if There is No Will?
    hapla - Your Question:I have been paying back 7 different debt companies £1 month for years as I got myself in to trouble with a bad…
    17 November 2017
  • FacingBereavement
    Re: Questionnaire: Do You Need Bereavement Counselling?
    Annaboys3 - Your Question:My mom passed away February 22nd of this year the same day I gave birth to…
    17 November 2017
Further Reading...
Our Most Popular...
Add to my Yahoo!
Add to Google
Stumble this
Add to Twitter
Add To Facebook
RSS feed
You should seek independent professional advice before acting upon any information on the FacingBereavement website. Please read our Disclaimer.