HMRC reminds executors: not every estate needs a tax return

Administering the estate of a loved one can feel overwhelming, especially when it comes to understanding any tax responsibilities.

HMRC has recently clarified that not every estate will need to complete a formal self-assessment tax return. Whether one is required depends on the size and complexity of the estate, as well as any income or gains received while it is being administered.

When is a tax return needed?

Some estates are relatively straightforward and may not require a self-assessment tax return, instead being dealt with through HMRC’s informal reporting process once administration is complete.

However, a formal tax return may be required if the estate is more complex, for example where:

• The estate is of significant value.
• Tax liabilities arise during the administration period.
• The estate’s circumstances mean additional tax reporting is required.

Why this matters

HMRC has issued the reminder after identifying confusion around how estates should be reported.

For executors, the important thing is not to assume that every estate follows the same process. Understanding the reporting requirements from the outset can help avoid unnecessary delays, unexpected tax issues and additional administration later on.

Need advice?

If you’re acting as an executor and aren’t sure what your responsibilities are, seeking professional advice early can save time and provide peace of mind.
The team at Verallo can help you understand your obligations, manage the estate’s tax affairs and ensure everything is reported correctly. Get in touch with us today to discuss your circumstances.