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Legal News | 30.11.23

I’m an executor … do I need to prepare a tax return?

With many of us starting to prepare our own personal tax returns, executors may or may not be aware that in certain circumstances they must also submit a tax return on behalf of the estate.

An estate will be considered ‘complex’ if any of the following apply –

  • the estate was valued at more than £2.5 million when the person died;
  • the total Income Tax and Capital Gains Tax due is more than £10,000; or
  • the executors sell more than £500,000 worth of assets in any single tax year during the administration period.

If any of those conditions are met, the estate must be registered with HMRC and a tax return will need to be submitted.

However, if none of those conditions are met, the estate will be considered ‘simple’ and an executor can report the tax owed during the administration period by simply writing to HMRC – no tax return will be necessary.

Finally, if the only income an estate receives during the administration period comes from bank interest, and the total amount received is less than £500, there will be no need to report or pay any income tax to HMRC.

If you are an executor and would like help considering estate administration tax, or any aspect of the administration, please contact us at wealth@wansbroughs.com

 

Posted By Our Wills, Tax, Trusts & Probate Team