Few things in life are guaranteed, but taxes and death are the exception. When we finally cross to the other side it is left to others to sort out the paperwork and to close down our affairs. It can be quite a daunting task taking many months and tax, which is often forgotten, is just one of the things that does need to be considered.
“Tell us Once” is the new initiative that helps people tell government departments just once about a death. Most counties run the service and you can find out about it at the registrar’s office when you register a death. You have three options and the registrar can advise
- You can have an appointment with an adviser
- You can use the phone
- You can go online – www.direct.gov.uk/death-tellusonce
Once you register for this service, all government departments will be informed; HMRC, Tax Credits, DWP, DVLA and the passport service to name a few. If the service is not available in your area you will still need to contact each department separately.
Once DWP are informed they should contact you about any changes to your state pension or benefits. Once HMRC are informed they should send you a form R27. This form allows you to finalise the tax affairs of the person who has died and should be completed by their personal representative (PR). Quite often this is the spouse, but if there is a will the PR will usually be named within it. The responsibility can be transferred to another person, like a solicitor to act as the agent. There is a section on the form to let you do this.
The R27 is basically looking at the income of the deceased from the 6th April (beginning of the tax year) until the date of death. HMRC may ask for a tax return if the tax affairs are complicated or if certain types of income are involved. HMRC will tell you if this is required. Quite often a refund of tax is due, so a form definitely worth completing. The R27 has been revamped this year and one of the many new benefits is that it now asks about the surviving spouse/partner. So often in the past any changes to a survivor’s income had been ignored and remaining married couple allowance had been lost. The form now asks you if your pensions are likely to change and you can request a P161(W).
The P161(W) allows you to inform HMRC about your change in state pension where national insurance contributions have been transferred or about changes because of inherited pensions or savings and investments. It is not unusual for a person who is bereaved and has never paid tax to become a tax payer overnight. The form will amend the taxpayer’s tax codes and should transfer or stop allowances like the married couples allowance or the blind person’s allowance as required.
HMRC have developed a bereavement helpline which is operated by staff in their Cardiff office. If you call 0845 300 0627 and choose the option ‘if you are calling about a person who has died’ you will be directed to the bereavement team who should be able to give you the advice you need.
This article is by Tax Help for Older People (operated by registered charity no 1102276), offering free tax advice to older people on incomes below £17,000 a year. The Helpline number is 0845 601 3321 or geographical 01308 488066