Completion of Form R185 (Estate Income) 2016/2017

R185

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We complete Forms R185(Estate Income) when finalising the tax position of an Estate.  With effect from 6 April 2016 all interest is paid gross, and dividends no longer have a Tax Credit attached to them. The Dividend allowance and savings allowance also introduced with effect from 6 April 2016 only apply to individuals, and not to Personal Representatives/Trustees.  Prima facie this appears to mean that PRs/Trustees will have to account for taxes payable by the Estate on income received in the Administration period, but I note HMRCs Trust and Estates newsletter (04/16) states that HMRC will not require details where the only source of income is savings interest and the tax liability is less than £100.

HMRC's advice is silent, however, on how the Form R185 is to be completed.  If, say, the Estate receives £600 gross interest and £100 gross dividends how are these shown on the Form R185, which has no boxes to show gross income without deduction of tax.  Or do the figures all have to be grossed up (at basic rate?) - which would surely mean that virtually all Estates would have to make informal payments/Tax Returns?  Has anyone looked at this please?  I'd really welcome your views - many thanks

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By maxaca
24th May 2016 16:25

as net now equals gross presumably you just enter the amount actually received as previously and strike through the tax boxes - clearly this was rushed through so quickly that no thought was given to practical consequences...

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By Tim Vane
25th May 2016 00:03

Why not just wait until the new R185 draft forms are published later in the year? Surely then all will become clear. My guess it that there will be a redesigned SA107 for 2017 and a corresponding update to the R185 and PR notes.

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By Samantha1
23rd Jan 2017 12:14

Hello
I am Executor of an estate. I made some interim £ distributions. HMRC has given me some R185 forms to pass to beneficiaries. the forms are v difficult to understand for me as a lay person. I have not finished administration of the estate. I suppose I should take these to an accountant? Rather than a wills and probate solicitor? In your experience are these forms to be completed once the administration period is concluded? As Executor am I responsible for completing these forms on behalf of the beneficiaries (v hard to do since I can't make sense of them)? One of the beneficiaries lives in France, but has been receiving income from this UK estate - should he complete a UK tax return? Interim financial distributions were made in 2016/2017 only. Thanks for any advice you can give.

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