As we know, HMRC is taking an inordinate length of time to respond with their agreement to the tax liability on estate income, where the informal route was used. I thought the purpose of this was to speed up matters! Currently, I am, but for paying the tax liability and making a final distribution to the beneficiaries, at the end of the administration of an estate where the death occurred on the 26 October 2023, so not long therefore before It would be necessary for this particular estate to be registered for TRS If the administration has not been completed by 26 October 2025. I suppose I could take the risk of distributing to the beneficiaries and holding the reserve to pay the tax, but would that still mean that the administration hasn’t been completed. It seems ridiculous that, due to delays by HMRC, one has to register an estate and incur further expense and delay.
I agree that this is one of the many unacceptable delays by HMRC, exacerbated by them no longer accepting payment by cheque with the letter reporting the income. However, I think you can rely on HMRCs definition of when the administration has come to an end which is when the residue has been ascertained:
“Residue is only ascertained when the personal representatives have both established the net worth of the estate and provided the liquid funds to pay liabilities and pecuniary legacies. Once that point is reached residue is ascertained and it is irrelevant that the assets have not been distributed.”
CG30810
So long as the executors are content that they have correctly calculated the tax due, this condition is met so no need to register the estate with TRS.
Those in charge of TRS should read TSEM6045, 6071 and 7360. I know reading is a chore. Perhaps they can access a video on You Tube or TikTok or be chipped for digital programming at home or at their main base in Tuscany or Saint-Jean-Cap-Ferrat.
Just to add, I have taken the views as above about the TRS and estates.
if i know all the assets and liabilities, and have the funds to cover, but holding soem back while waiting on, say, HMRC, I would consider it ‘ended’ and not register it.
I have told a client this the other day. I would happily argue this with HMRC if they ever contacted the executors/us about it. Until that date and I lose such an argument I will be advising clients of this.
When submitted an informal report to HMRC, we always included the wording, along the lines of ‘period to the end on administration on xx/xx/xxxx’.
On this basis, I wouldn’t consider a TRS would be required. However, I do appreciate the funds may still be held on account. I guess if this is an interest bearing account, it would be for the beneficiaries to report personally….