Handling tax returns for deceased individuals can be a complex process, and HMRC has provided guidance for agents to streamline the self-assessment procedures during the administration period. In this article, we explore key considerations and steps to ensure a smooth tax filing process for estates.
Before initiating a self-assessment return for a deceased customer, agents must confirm the presence of a personal representative or executor. Additionally, a valid 64-8tax agent authorization on HMRC systems is essential. Automating repayment requests hinges on these prerequisites, reducing manual processing time.
Upon a taxpayer's demise, HMRC suspends the acting authority of the current agent. To continue representing the deceased taxpayer, agents must submit a new 64-8 agent authorization form.
HMRC acknowledges delays in reactivating self-assessment records, particularly when a deceased person's record has been closed. For security reasons, paper returns are now recommended, using the existing Unique Taxpayer Reference (UTR) for larger income or gains before death.
Authorized tax agent scan file online for the tax year in which the person died, post the tax year's end. However, the deadline for online filing remains either 31 January after the tax year or the date specified in the notice to file letter.
Contrary to automatic repayments, deceased customers' repayments require manual processing. Agents may need to contact the bereavement helpline to initiate claimed repayments, even if the return's repayment section is completed as a precaution.
Reporting income and gains arising after a person's death must be done separately during the administration period. HMRC advises contacting the specialist bereavement helpline for such enquiries.
In cases where an estate becomes complex during the administration period, personal representatives need only file a self-assessment return for the tax year in which complexity arises. Formal returns for earlier years should clarify the estate's non-complex status to avoid late delivery penalties.
Successfully managing tax returns for deceased individuals demands careful adherence to HMRC guidelines. Agents must navigate reactivated records, understand electronic filing nuances, and tackle the distinctive challenges presented by complex estates.
As tax agents navigate the unique challenges posed by deceased individuals' tax returns, adherence toHMRC guidelines is crucial. Timely notifications, updated authorizations, and careful handling of repayments ensure a smoother process for both agents and the bereaved. For personalized assistance and consultations on tax concerns, schedule a consultation with Elena Meskhi and her team.
