Ferne Morris

Dear Sirs I have encountered a problem with the NS&I reporting of interest to HMRC. It occurs where the owner of the NS&I product dies part way through a tax year. On several occasions I have been told by HMRC that the whole years interest has been reported as the deceased's income. Because they have received the information from NS&I no amount of proof from the executors will change their accounting. This is not right and leads to incorrect income tax being paid by the deceased and the estate. Where there is a death there is in effect a change of ownership and the interest is taxed differently in the two periods. Can NS&I please report the income to the date of death and the income post death separately. Thank you.