Cash Basis in year of death

Does the cash basis automatically cease in the year of death for an ongoing rental business?

Didn't find your answer?

I have searched high and low and have failed to find definitive guidance on this.

I have a client with brought forward rental losses who died just after receiving the first rental amount for a new tenancy on a solely owned property. I understand that the losses do not pass to the estate. I also understand that both the original taxpayer and the estate can produce rental accounts under the cash basis.

The question is does there need to be a cessation of the cash basis on death and a consequent restart within the estate, if so desired? Obviously it would be helpful to be able to use slightly more of the soon to be lost losses against the rent received but helpfulness is not something I generally associate with HMRC.

Many thanks

Replies (6)

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RLI
By lionofludesch
05th Jan 2020 11:04

He ceased when he died.

I'm not sure you'll find any "guidance" on this self-evident point.

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Replying to lionofludesch:
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By Charles_Bennett
05th Jan 2020 14:36

Hmm, OK I apologise for having put you to the trouble of feeling you had to respond.

I will stick to "traditional accounting" then as I suspected, but I would have been doing my client and their beneficaries a disservice if I hadn't at least tried to see if there was a way of utilising more of the losses already incurred.

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By Accountant A
05th Jan 2020 12:09

Unless you have been appointed by the executor, you don't have a client; you have an ex-client.

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Replying to Accountant A:
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By Charles_Bennett
05th Jan 2020 14:20

I am aware of this and have been appointed by the executor, but thanks for your less than helpful attempt at point scoring.

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Replying to Charles_Bennett:
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By Accountant A
05th Jan 2020 14:34

Charles_Bennett wrote:

I am aware of this and have been appointed by the executor, but thanks for your less than helpful attempt at point scoring.

You said you have a "client with brought forward rental losses" which you don't so it was attempting to establish the facts which are often useful in determining the appropriate course of action.

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Replying to Accountant A:
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By Charles_Bennett
05th Jan 2020 14:43

Thank you, but if you wish to establish facts then I would suggest that asking questions is a better method than making statements.

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