HMRC’s Bereavement Service and Personal Applications

In 2012 a dedicated HMRC bereavement services team was launched that deals with PAYE and Self Assessment issues which arise when a taxpayer dies.

The team provides family members or personal representatives with a single point of contact. They work to finalise the PAYE and Self Assessment affairs of the deceased. The family members or personal representatives are ultimately responsible for settling any tax liability on untaxed income arising to the estate during the administration period. There are more complex rules where trusts are involved.

A New Automated Process

The R27 form Reclaiming tax or paying tax when somebody dies was withdrawn in 2014. It has been replaced with an automated process for PAYE taxpayers that is simpler to navigate.

This is because much of the information requested is held within the Real Time Information (RTI) system. The process for Self Assessment taxpayers has been replaced with a tailored service, which includes letters that match the individual’s circumstances.

Since the service was launched the specialist bereavement teams handles over 8,000 calls a month and offers a more simplified process for loved ones at a difficult time. HMRC has also made it easier for family members to authorise someone to act on their behalf.

At Key Business Consultants we are experienced in dealing with the issues that can arise. We are very happy to help in all these cases. In most cases, HMRC is able to settle the tax affairs of deceased taxpayers’ in-year instead of at the end of the tax year, giving the bereaved more certainty more quickly.

Estates in Administration

Whilst an estate is in the administration period it will usually be dealt with by HMRC’s Trusts & Estates department where:

• The tax liability for the whole of the administration period is in excess of £10,000, or
• the estate has a value at the date of death in excess of £2.5m, or
• the proceeds of assets sold by the personal representatives in any one tax year exceed £250,000

The Trusts and Estates section also deals with any tax liability for the administration period:

• if a trust has been created either under the deceased’s Will
• or the rules of intestacy