Tax Return for Deceased Person Guide (on death)
Calculating and Paying Taxes after Death
The estate of the deceased will typically have to pay tax prior to any division of money to their heirs. You may not have to pay tax immediately after you get your inheritance, but tax obligations might arise down the road. Here is a handy guide on when and what to pay in taxes in the instance of death.
1. Work out the Income Tax obligations up to the day of their decease 2. Complete tax returns
3. Pay tax on any income that the estate receives
4. Determine if the estate needs to pay any Capital Gains Tax
5. Calculate the Inheritance Tax and determine who is responsible for it 6. Determine if you have to pay any inheritance tax
Work Out income Tax Obligations till the Date of Decease
It is possible that the dead person may have paid too little or even too much Income Tax.
This might mean that the estate might owe or be owed a tax refund.
To ensure that the Income Tax paid is in line with what is owed, you need to contact HM Revenue & Customs (HMRC) who will adjust the tax calculation and make it right.
If the dead person was resident in Wales, Scotland, or England, you could use the Tell Us Once service to have the calculation reviewed. The Department of Work and Pensions (DWP) and the HMRC will then contact you with details about the entitlements, benefits, and tax regarding the dead person’s estate.
If they were resident in Northern Island, you can call the Bereavement service, which provides a toll-free number (0800 085 2463) for any queries on a deceased’s estate.
Completing their tax return
If the deceased used to complete a self-assessment tax return you might have to do it too.
If you decide to use the Tell Us Once service, the HMRC will contact you in case you need to complete the self-assessment tax return.
If you cannot tell if the dead person regularly filed their tax return, consult the HMRC, which will furnish you with the information on how regularly they did so including the last time they submitted their returns. The HMRC will need you to have the National Insurance number of the deceased before they can provide you with the information you need.