Goodbye to the R27

October 24, 2014

As part of the administration of an estate it was necessary to submit a short form tax return for the incomplete tax year to the date of death. The H M Revenue & Customs (HMRC) form that had to be completed by the personal representatives was known as the Form R27. This detailed all of the income earned and tax paid by the deceased person from 6 April of the year of death to the date of death. It allowed HMRC to calculate whether there had been an over or underpayment of income tax during this period. It also allowed the personal representatives to notify HMRC whether a full estate tax return would be necessary and also if there were any trusts in the will and whether any trust records had to be set up.

However, the Form R27 is no longer available for deaths notified to HMRC from 13 October 2014. HMRC have replaced the Form R27 with two processes:

• For Pay As You Earn (PAYE) individuals there will be an automated process
• For Self Assessment individuals there will be a tailored service according to the individual’s circumstances.

In England, Wales and Scotland relatives of the deceased are able to use the government’s “Tell Us Once Service” on the website www.gov.uk. However, in Northern Ireland, relatives of the deceased must telephone the HMRC Bereavement Helpline on 0300 200 3300. It is hoped that solicitors will be able to make use of this service as well, although HMRC may not be able to discuss cases specifically until they have received written authority from the personal representatives.

HMRC insist that they have been able to scrap the Form R27 because they are making better use of the information which they already hold and can therefore reduce the amount of information they request. It is yet to be seen whether the promised improvements can be met and whether the income tax affairs of the deceased will be settled within the tax year of death. The Form R27 was a useful method of ensuring that HMRC had the correct information to the date of death and the new process could potentially discourage personal representatives from disputing details of income tax payments with HMRC.

Please note: The content of this article is for information purposes only and further advice should be sought from a professional advisor before any action is taken.

Cleaver Fulton Rankin, 50 Bedford Street, Belfast, BT2 7FW
T: 028 9024 3141, Fax: 028 9024 9096, www.cfrlaw.co.uk
A legal alliance Matheson Ormsby Prentice, Dublin & Cleaver Fulton Rankin, Belfast