I will keep this as simple as possible.
Deceased estate residuary income and allowable expenses (absolute interest) during a 3 tax year administration period is:
Year 1 After tax income £5,000, expenses NIL
Year 2 After tax income £5,000, expenses NIL
Year 3 Income nil, expenses £6,000
Expenses relate to the accountant's element of his bill relating to the ascertaining of Estate income and the income element of the Estate income tax returns (it has been fraught with problems).
In tax year 2, let's say that estate cash was paid to the sole residuary beneficiary for the first time amounting to say £500,000. So, for year 2, his R185 measure of estate income was £10,000 (it was nil for year 1).
It took so long to determine the estate income that it was in year 3 that the executors were billed by the accountant.
I have combed through Tolleys under "Deceased Estates" as well as HMRC's Trust and Estate Manual (TSEM7200 to TSEM7900) to see if the year 3 allowable administration expenses can be carried back, but I cannot find any specific authority to do so.
Excess expenses can certainly be carried forward, but from experience, it can be towards the end of the administration period when accountancy bills are raised.
I am sure that donkey's years ago it was permissible to carry back excess expenses under the old rules, unless my memory is playing tricks.
Does this mean that the year 3 expenses are not R185 tax allowable.