From October 2014, form R27, which deals with a deceased’s income tax affairs up to the date of death, is no longer required.
HMRC has said that the background to this change is that the R27 process “causes a lot of work for both the customer and HMRC.”
HMRC was unable to deal with 50% of form R27s when first received. On the HMRC bereavement helpline, 34% of calls were about filling in form R27 and 15% were to check the progress of a form R27 already sent to HMRC. The helpline takes over 8,000 calls each month.
HMRC may hear of a taxpayer’s death via the ‘tell us once’ service, from a relative, or professional adviser.
HMRC will now send one of three letters
- Letter one will only be sent where HMRC don’t know the details of the personal representative (PRs). This will be sent to the deceased’s last known address, asking for the PR’s details.
- Letter two will be sent to the PR of a former PAYE taxpayer “with relatively simple affairs,” confirming that HMRC is aware of the death and that they do not need to take any further action. This will be an automated process.
- Letter three will be sent to the PR of a taxpayer with “more complex self-assessment tax affairs,” asking them to complete a self-assessment return on behalf of the deceased. This will happen where HMRC does not have the necessary information to finalise the deceased’s affairs. It will be a tailored service.
HMRC’s research report on the testing of the new letters can be found on the gov.uk website.
PRs and professional advisers will be pleased to hear that HMRC intends to make more use of the information already on its records. The drive to improve customer service is also welcome.
In the absence of form R27, we would recommend that agents complete the agent authorisation form 64-8 if contacting HMRC regarding a deceased person’s affairs. This is still advisable if the agent has acted for the deceased during his or her lifetime.
In a letter two situation, it should still be possible for the PR to claim any repayment of tax due.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.