How to Deal with the Estate of Someone Who has Died

09/12/2023 - 6 minutes read
Table of Contents SHOW

How to deal with the estate of someone who’s died is a frequently asked question by the executors of an estate as part of their administrative responsibilities.

How to Deal with the Estate of Someone Who has Died

How to Deal with the Estate of Someone Who has Died

Reporting an estate to HMRC

You may need to send information to HM Revenue and Customs (HMRC) about the estate’s income from the day after the death until the date everything has been passed on to beneficiaries (the ‘administration period’).

What you need to send depends on:

  • – the value of the estate of someone who has died
  • – how much income it generated during this time
  • – if there was any tax to pay

When you do not need to report the estate

If the only income the estate received during the administration period was from bank account interest and that was less than £500, you do not need to report the estate to HMRC.

Reporting on ‘simple’ estates

Report tax owed in the administration period simply by writing to HMRC (known as ‘informal arrangements’) if all of the following apply:

  • – the estate was valued at less than £2.5 million when the person died
  • – the total Income Tax and Capital Gains Tax due is less than £10,000
  • – you did not sell more than £500,000 worth of assets in any single tax year during the administration period

To report the estate send a letter to HMRC at the end of the administration period, including:

  • – your name, address and phone number
  • – the name, address, National Insurance number, and Unique Taxpayer Reference (UTR) of the person who died
  • – any Income Tax and Capital Gains Tax still due for the whole administration period
  • – any Income Tax and Capital Gains Tax you have reported and paid during the administration period, for example if you sold property

Pay As You Earn and Self Assessment
HM Revenue and Customs
BX9 1AS
United Kingdom

HMRC will then send you details on how to pay any tax the estate owes.

How to deal with the estate of someone who has died

How to deal with the estate of someone who has died – Simple vs Complex estates

Reporting on ‘complex’ estates

If you cannot use informal arrangements you must register the estate online and send a Self Assessment tax return for the estate.

A Self Assessment return for an estate is different from either a Self Assessment return for someone who’s died or an Inheritance Tax return.

You must register by 5 October after the tax year you’re sending a return for.

For example, to send a return for the 2021 to 2022 tax year (ending 5 April 2022) you must register by 5 October 2022.

To register an estate you’ll need:

  • – to make a Government Gateway account as an ‘Organisation’ – you can create this before you sign in for the first time
  • – an email address
  • – your details, including your National Insurance number or passport number
  • – the details of the person who died, including their National Insurance number

You need a separate Government Gateway user ID for each estate you register.

If you’re an agent, you’ll need to use your agent services account. You’ll need permission from the personal representative to access the estate details.

Register an estate online.

Once you register, you can manage information about the estate.

Sign in to your account to:

  • – update your details
  • – update the estate’s details
  • – appoint an agent
  • – close the estate once it has been distributed

After you’ve registered an estate

HMRC will send you a UTR for the estate within 15 working days. Use this to either:

You must pay any tax due by the next 31 January following the tax year in your return (the same deadline as for sending a return online).

How can MCL Accountants help with your queries on how to deal with the estate of someone who has died?

Contact MCL Accountants on 01702 593 029 if you have any queries on how to deal with the estate of someone who has died or if you need any assistance with the preparation and submission of your business accounts or self-assessment tax returns to HMRC.