Telling HMRC about the Administration Period

The law (Section 7 Taxes Management Act 1970) requires the personal representatives to notify liability within 6 months of the end of the tax year of liability. Failure to do so may result in a "late notification penalty" (under Schedule 41 Finance Act 2008). For example, if an individual dies during the 2018/19 tax year and the estate receives untaxed income or has a chargeable gain in the tax year then notification is required by 5th October 2019.

Guidance can be found at https://www.gov.uk/self-assessment=tax-returns/returns-for-someone-who-has-died

HMRC state that you must file a tax return if any of four listed conditions apply which mean that the "informal arrangements" preferred by HMRC cannot be used.

1. the total Income Tax and Capital Gains Tax due for the administration period was more than £10,000
2. the estate was worth more than £2.5 million at the date of death
3. the date of death was before 6th April 2016 and more than £250,000 a year came from the sale of the estate's assets by administrators or executors
4. the date of death was on or after 6th April 2016 and more than £500,000 a year came from the sale of the estate's assets by the administrators or executors

If any of the four listed conditions are met (or the personal representatives are unsure whether they will be met) the personal representatives must formally register the estate online for Self Assessment using the "Trust and Estate Registration Service". This can also be done through us as your agent.