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New deceased client - what are the pitfalls?

Client died in March 2012. Income was from property jointly with his wife, and he also had income from shares.

The client is new to me - he previously did his own tax returns.

I have been asked by his wife to complete the 2012 tax return. Can anyone give me advice on pitfalls I may expect?

And who signs the tax return?

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03rd May 2012 13:59

You need to know

Who is the executor under the Will.  This is likely to be the wife, but check anyway.  The executor takes on responsibility for signing Tax Returns, etc.  If there is a solicitor dealing with winding up the estate you will need to liaise with them over paperwork

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By LyneT
03rd May 2012 15:13

Your biggest "pitfall" is

Your biggest "pitfall" is that you don't include everything.  Obviously your starting point for this year is last year, but if he has been doing it himself he may have missed stuff.

If the income from property is joint property, then on his death the whole of the income goes to joint owner (in this case wife) regardless of the will.  If he hold the property as tenant in common rather than joint then the property passes according to the will.

As above, executor signs the will.

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By ugdiv
03rd May 2012 15:52

Will HMRC talk to me?

LyneT wrote:

... then on his death the whole of the income goes to joint owner (in this case wife) regardless of the will.

Thanks for that info. I assume you meant the income arising after his death.

He died in late March, so would the rental income be split between husband and wife up to his death?

ALSO, will HMRC talk to me or do I need a 64-8 from his wife?

 

 

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By LyneT
03rd May 2012 16:38

In the absence of any election, it would be split 50:50 up until his date of death.  His wife would get the whole of the income after his death.  You may have to accrue for rents not paid but due.  This will be due to the estate of the deceased.

The dividends not yet paid will form part of the estate income.  You need not accrue for them.

Yes, you will need 64-8.

I should have said exectutor signs tax return, not executor signs the will!

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By ACDWebb
03rd May 2012 16:49

You will need

a 64-8 from the Executor, and look for the HMRC form R27 that is the other form they normally require

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03rd May 2012 19:36

Liaison with solicitor

check with solicitor exactly what bank accounts shares etc he had and cross check those to any info you hold. I used to d/w a lot of "deceased" clients in one particular job and it was surprising how many even long standing clients turned out to have a secret bank account. Not nec large amounts of income (not at current interest rates!) but a curiously common phenomenon. 

 

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New bereavement services team

This was one of the areas flagged up as part of the service quality improvement project with professional bodies, and resulted in the formation of a new bereavement services team and a revised R27, as we reported last month.

If the executor puts your name on the R27, the HMRC should then deal with you directly.

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