HMRC guidance on registering and managing an estate

HMRC have issued new guidance for executors and personal representatives on how to register and manage an estate for Income Tax and Capital Gains Tax purposes.

An estate can be registered with HMRC and managed online. It must be registered if:

• It is worth more than £2.5 million at the date of death.
• The value of assets sold by the personal representative in the tax year exceeds £500,000.
• The total Income Tax (IT) and Capital Gains Tax (CGT) due for the period between the date of death and the date the estate is settled, known as the ‘administration period’, is over £10,000.

The estate must be registered by 5 October after the tax year in which it starts to receive taxable income or has capital gains on which CGT is due.

• Once registered the estate will receive a Unique Taxpayer Reference (UTR) and a Trust and Estates Self Assessment return will need to be filed.
• If the personal representatives dispose of UK residential property the 30-day reporting and payment deadline applies.

This registration process is for Income Tax and CGT only. Inheritance Tax (IHT) is dealt with separately as it relates to the deceased as an individual and not the tax position of the post-death estate. The focus is on IHT and distributing the assets of the estate to beneficiaries. Often the need for the estate to declare income received and capital gains crystallised during the administration period is overlooked resulting in Late filing and Late payment penalties.

If there is no requirement to register but the estate has tax to pay, then informal arrangements can be used instead. This can be done in writing to HMRC and telling them:

• The Income Tax and CGT due for the administration period.
• The name, address, National Insurance number, and UTR of the deceased.
• The personal representative's name and contact details.

The person registering the estate will need a government gateway account. Once the estate has been registered they can use the online service to:

• Appoint an agent to deal with the estate’s tax affairs for them.
• Amend details about the estate such as changes to the personal representative or their details
• Tell HMRC that the administration period has ended and the estate has been settled. This can also be done by completing form SA900 and sending it to HMRC.

Useful guides on this topic

Trusts & Estates: What’s New 2020/21
HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version.

Trust Registration Service
What is the Trust Registration Service? What trusts does it apply to? What are the requirements and deadlines?

Private client: What’s on? July 2021
A Finance Act 2021 Private Client update for advisers and their clients.

Scottish Income Tax: Trusts & Estates
Scottish Income Tax has applied since April 2016 and is payable by Scottish taxpayers on non-savings non-dividend income only. What does this mean for trusts, estates and their beneficiaries?

CGT: Payment of tax
When is Capital Gains Tax (CGT) due? Can I pay in instalments? What are the penalties if I pay late?

External links

HMRC guidance:

Manage your estate's details 

Register an estate as a personal representative 

Report and pay Capital Gains Tax on UK property: guidance for personal representatives on how to report a gain.