Are you using the HMRC Bereavement service in your estates?

 In Comment, Gill's Blog

Disclaimer: LawSkills provides training for the legal industry and does not provide legal advice to members of the public. For help or guidance please seek the services of a qualified practitioner.

In December 2011, in response to pressure from representative bodies, HMRC undertook to improve their bereavement processes and the new service was launched in April 2012. Are you using this service? Is it working?

Remember that Outcome 1.4 of Solicitors Code of Conduct 2011 says that you must have the resources, skills and procedures to carry out your clients’ instructions and Outcome 1.5 say the that service you provide to clients must be competent, delivered in a timely manner and take account of your clients’ needs and circumstances.

Notifying HMRC on the death of a deceased

In the past on the death of a deceased person the tax office which was the one used by the deceased had to be notified of the death and it was common practice to submit a copy of the death certificate to that office. Sometimes, this resulted in letters being sent asking for more information about the estate and often the sending of Form 920 or Form R40 or Form R27.

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There is now a new Form R27 which can be found at http://www.hmrc.gov.uk/forms/r27.pdf and it specifically says not to send in with it a copy of the death certificate or indeed a copy of the Will or anything else. Simply send in the form to the single point of contact for ALL bereavement cases:

HMRC PAYE & Self Assessment
PO Box 4000
Cardiff
CF14 8HR

This tax office will ask if they need any further information from you.

What about form 64-8?

This form is the notification to HMRC by a taxpayer of the name and other contact details of their preferred tax agent. It is therefore a vital piece of information in estates where even if the PRs are members of the firm it will be the firm acting on their behalf and so the PRs (whoever they are) will need to authorise the firm as their tax agents if HMRC are to be able to communicate with the firm directly.

The new Form R27 does have a space for the appointment of agents and HMRC are in the process of reviewing their authorisation processes around deceased estates but they are not as yet finalised so for the time being it would be prudent to keep on submitting form 64-8.

Toolkits

In the complex estate, i.e.one where:

  • there is more than £10,000 of tax due on the income over the whole administration period; or
  • the estate administration continues into a third income tax year; or
  • there is a very high probate value, generally over £2.5 million; or
  • the PRs have disposed of a chargeable capital asset and the proceeds of sale exceed £250,000

then the Trust and Estate Tax Return (SA900) would have to be completed during the administration period. There is a Trusts & Estates Toolkit which helps here http://www.hmrc.gov.uk/agents/toolkits/trusts-estates.pdf

HMRC are working on an online bereavement toolkit which should be available soon. Work is also being done to improve the quality of call handling; re-writing letters and further improving the guidance available for taxpayers.

Practice point

HMRC have listened to professionals and lay people alike and have produced a simplified system for dealing with the bereaved. We should update our records and procedures to use the system in order to provide our clients with a competent service.

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