I am hoping someone might have some pointers as I am struggling to locate anything concrete in the HMRC ICT guidance.
I have an estate where the deceased was non UK-dom and resident, and the UK assets comprised only of two properties in Yorkshire (which coincidentally have just successfully been sold at auction this morning!) and a small cash account.
The estate passes to the surviving spouse. There is no IHT on the estate, nor CGT on the sale. I am just confirming the ICT points with a view to finalising the estate asap.
The properties were rented out in the deceased’s lifetime but in the year prior to his death were subject to severe flooding and therefore were going through extensive repair works via the insurance claim on and shortly after his death. Part of this insurance claim consisted of a lump sum payment for lost rental income for the period the works were being done and we received this payment, which is partly for income that would have arisen prior to death, and partly what would have been estate income. The total sum allocated to the estate administration period is roughly £7000.
I am trying to find something to confirm 100% whether the payments for lost rental income needs to be reported for the deceased’s/estate’s ICT purposes. My supervisor and I are leaning towards it being treated as a compensation payment where ICT would not normally be payable, but I can’t find anything in the HMRC guidance to confirm if this is the case when the payment is specifically for lost rental income, so I am reaching out to other practitioners / my accountant contacts that may have experience dealing with such specific points!
Thanks in advance for any input.