TSEM7414 | Deceased persons: administration periods: failure to agree the tax liability

The informal procedures are in place because the tax affairs of most estates are not complicated, and most estates only last for a short time. In the majority of cases it is easier for both the personal representatives and HMRC to resolve the estate’s tax position without setting the requirement for the estate to be included within Self Assessment. It is envisaged that agreeing the tax liability will be fairly straightforward with only minor adjustments needed to tax computations.

The exceptions are where agreement is unlikely without entering into protracted correspondence. There might be a dispute over the basis of assessment for example, or a difference of opinion about HMRC’s interpretation of legislation or practice. In these situations the informal procedures are not appropriate and Trust & Estate Self Assessment tax return(s) will be required for each year of the administration period. A formal enquiry into the return(s) will then be opened.