Tax and Benefits After Death

Contacting the deceased’s Tax Office

Any close relative of the deceased can inform HM Revenue & Customs (HRMC) about the death. This should be done as soon as possible to avoid receiving mail that might cause distress to the remaining family. Details for contacting the deceased’s Tax Office can be found on any tax paperwork received from HRMC, such as PAYE coding or self assessment tax return, or you could ask the deceased’s last employer.

Self Employed

If the deceased was self employed, contact the National Insurance Contributions Office to stop payments being collected.

Married couple’s Allowance

If you or your spouse or partner were born before 1935 you may have been claiming the Married Couples Allowance, and only if you were paying tax. When one of you dies, the remaining spouse or partner will still receive the Allowance for the remaining period in that tax year. You can claim this by completing Form 575 Notice of Transfer.

Tax Credits, other benefits and State Pension

It is important to inform the payment office as soon as possible and certainly within 1 month of the death. If you don’t, you may be paid too much and have to repay the excess, or, on the other hand, you may not be paid all that you are entitled to.

Role of the Executor

The Executor(s) are responsible for dealing with the deceased’s estate. One of the duties is to settle the financial affairs of the deceased, such as claiming back income tax and settling tax affairs in general. If Wincham Executor and Trustee Company Limited have been appointed as co-executors we will take care of these duties for you.

Income Tax

The deceased may have paid too much income tax in the Tax year in which death occurred. If so, the Executor will be able to claim a Tax Refund on their behalf and a refund over the previous 5 tax years as well. You may need to pay income tax on assets in the deceased’s estate during the period between the day after the date of death and the day when the financial affairs are settled.

Tax Affairs – General

The Executor will be responsible for settling the deceased’s tax affairs up to the date of death, and for paying any tax due on the deceased’s estate. Most tax liabilities are straightforward and can be dealt with by the deceased’s tax office.

The Executor may have to complete form R27 (income tax) or R40 (repayment of tax on bank or building society interest) for the period up to the death. If any tax is due you may be able to make an informal payment without the need for a Self Assessment tax return.

Company Taxation

The UK Limited company continues to operate as normal and ownership is transferred via shareholdings as specified in the deceased’s Will. No taxes will be payable in Spain or the UK unless the beneficiaries decide to sell the company for a profit, then Capital Gains Tax may be payable.

Inheritance tax (or death duty)

Completing Inheritance tax forms are part of the probate process, even if the estate is not liable to pay Inheritance tax.

Spain: Inheritance Tax will not be payable in Spain.

UK: If the value of the estate is below the current threshold of £650,000 (married couple) or £325,000 (single person), Inheritance Tax will not be paid. The value of the estate is calculated as a total of the assets of that estate plus any gifts made by the deceased within the preceding 7 years.

Inheritance tax in the UK is currently set at 40% and is payable on the value above the threshold. Notable exemptions from Inheritance Tax in the UK are assets left to a spouse, political party or a charity.

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Wills and Probate

It is always advisable to review your Will at least every 5 years.

Even though you may already have a Will, you should consider whether or not your personal circumstances have changed or whether any subsequent change in the law has affected the validity of your Will or the granting of Probate.

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UK Will Writing Service

An Individual Will is prepared for a single person or for spouses/partners who have different terms under their respective Wills.

A Mirror Will is actually two Wills prepared for spouses or partners who wish for identical but reciprocal terms such as leaving their assets to each other.

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Lasting Power of Attorney

An LPA is a legal document giving trusted individuals the authority to make decisions on your behalf if you become unable to make them yourself.

The document is drawn up when you are able to make decisions and, once registered, becomes effective immediately and can be used at any time.

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Spanish Wills

If you think that you require a Spanish Will, it’s worth noting that all of your affairs can be dealt with in the UK with a UK Will.

Remember that a UK Will can be altered in the future if circumstances change and can be drafted to revoke all previous Wills ‘in any location’, giving you the flexibility you need.

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Make An Enquiry

Address: Wincham Executor & Trustee Company Limited
Wincham House
Greenfield Farm Trading Estate
Congleton
Cheshire, England
CW12 4TR
Phone: +44 (0)3333 441 176
Email: wills@wincham.com

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