I've tried to whittle this rather complicated situation down to its basics:
I am executor for A's will. He died in 2013 leaving, as a specific legacy, an income-producing asset (properties
rented out) to B. The legitimacy of this legacy was in doubt until 2015, when it was confirmed and the asset
was transferred into B's name. The estate received income from the asset for the 2013-14 tax year. No
distributions have yet been made to B, and as total income tax liability for the Estate will be under
£10,000, any tax due for the administration period will shortly be payed by informal arrangement with HMRC.
I will then distribute the 2013-14 income to B.
Bearing in mind that:
1. A specific legacy (and its income) is considered the property of the beneficiary from the date
of death.
2. Rental income is deemed to be earned (and therefore tax liability arises) when it becomes due, not when it is
received,
My question is:
Can I then issue an r185 for the year 2013-14 to B so that he, as a non-taxpayer, can get a
tax rebate for that year (even though the tax itself was not payed by the Estate until the 2015-16 year)
If not, is there any way that B can get this rebate.
Replies (2)
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Hi
This is useful : http://www.hmrc.gov.uk/manuals/tsemmanual/tsem7490.htm
I read that as saying that you can issue an R185 for the earlier year, once the income has actually been paid.