Tax on interest after a person has died

HI, My mother died last year and I'm the executor. I've sorted out all her personal tax payments and the estate wouldn't be liable to IHT as it is below the limit. The one remaining thing is that her accounts earned £1,350 in between her dying and me getting the probate through. I'm assuming I have to pay income tax of about £270 on this amount before I make the final distribution to the beneficiaries. I've written to HMRC PAYE department but not got anything back. Who do I contact about this?

Hi,

Yes, this is taxable income as there are no personal allowances due in the period of administration. You can see guidance for reporting income in the administration period here: Reporting an estate’s income to HMRC Thank you .

But would it not be the case that the Executor would then provide the beneficiary of the interest with a form R185 to indicate that tax had been suffered on that element of their inheritance and that the tax suffered can be deducted from any tax due for that year, or reaid accordingly?

Hi ,
 

There are several forms R185.  The form R185 (Estate Income) is used by an executor or administrator of an estate, to advise beneficiaries about income from the estate of a deceased person.  see :  Tell beneficiaries about income from the estate of a deceased person   ). Thank you .

I've spoken to all of the beneficiaries. All apart from one, all are basic rate tax payers who have already earned over £1,000 in interest so wouldn't be able to claim anything back. The other one lives in Australia and doesn't want the hassle for £54. Do I still have to produce a R185 for each of them?

Hi,
For assistance on R185 please contact the Trust Helpline 0300 123 1072 9.00am to 5.00pm Monday to Friday.
Thank you.