Many years ago, I asked HMRC if it would agree to waive the need for the executors of an estate, which was given to UK charities, to report gross interest and dividends thus, saving having to submit figures, pay tax and then, issue R185s to the charities so that they could reclaim the tax. The answer I received was no! Can anyone tell me why they would have given me that decision! Due to pressure of work at the time, I just accepted it. As we know, even using the informal route to settle the tax can add some months to the administration period waiting for their letter and payment notice.
I have also requested this previously, but ultimately HMRC have no powers to provide a concession or exemption in this regard, as executors are legally responsible to account for all estate income regardless of who the beneficiaries are.
I got excited when I read the first part of your post but then my heart sank when I read the rest as I have the same situation and it just seems crazy to have to declare the income, pay the tax only for the charities to claim it back.