Probate and outstanding tax

A case was publicised recently whereby a lady whose mother passed away only a few weeks ago, was sent a letter by HMRC notifying her that a £100 fine had been applied to her mother’s account, for failing to send in her self assessment tax return on time, for the year ending April 2011.  HMRC also indicated that £10 each day was to be added to the fine until the end of April, should the initial fee not be paid in full.

The lady, who whilst her mother was alive, acted as power of attorney, was both horrified and confused. 

As is usual, as part of the probate process, the daughter was required to identify any outstanding tax or creditors, but at that time, it was deemed that no tax was due and indeed it had been considered while the woman was alive, there was no reason to complete a self assessment form.

Concerned, as all the deceased’s bank accounts were frozen, there was no way for the woman to pay HMRC from her mother’s Estate.

On further investigation, HMRC revealed a letter had been sent out because the deceased had been expected to submit a tax return on receiving a small investment income.  In addition, her daughter’s power of attorney status had not terminated on the death of her mother, as it should have done.

It apologised to the lady in question, blaming its automated systems, and admitted that no sums were in fact due.

If you receive such correspondence on behalf of a deceased person from HMRC and you feel it may be inaccurate, be sure to contact your dedicated probate professional.

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