Income tax and capital gains up to the date of death

Outstanding tax issues

There may be more than one tax year that needs to be dealt with. For example, if someone dies on 30 April 2026, it is unlikely that their tax affairs for the tax year 2025/26 (that ended on 5 April 2026) would have been finalised, while there is also the short period from 6 to 30 April 2026 in the tax year 2026/27 to be considered.

The personal representative should contact HMRC’s bereavement service and ask which tax years need to be finalised and to find out if HMRC believe any information is outstanding. HMRC will generally only speak to the personal representative and will not disclose any information to other family members or friends of the deceased. 

If the deceased was employed, retired or on welfare benefits in the tax year that they died, HMRC should be able to confirm taxable figures for those sources to the personal representative.

Our page Bereavement: tax issues on death gives information about things to consider if the deceased was running a business when they died.

Getting information

HMRC will be able to give you some information on income and gains, but when you go through the deceased’s personal information you may well find bank statements, payslips, advice notices about pensions or state benefits, dividend vouchers, stockbrokers’ statements or interest certificates from banks and so on. Identifying all sources of income is key to being able to finalise the individual’s income tax position up to date of death. 

The sources of this income (for example, the bank balance giving rise to the interest or the share portfolio giving rise to dividend income) will also give you information to help establish the overall value of the estate. Looking at the deceased person’s previously submitted tax returns (if they completed tax returns and copies of these are available) can provide a useful starting point when trying to identify their sources of income. 

Increasingly, many details will only be available electronically and personal representatives may find it difficult to access the deceased’s digital assets and accounts. Each organisation will have its own policies regarding passing on data after someone has died and copies of the death certificate may have to be provided. Once a source has been identified, the executor should be able to obtain the information needed to value the underlying capital value for the estate and to take possession of the asset so that it may be distributed to the beneficiaries in due course.

If you have used the death notification service, they may be able to tell you the balances on various accounts and any interest credited to the accounts.

If the deceased had joint income (for example from a jointly owned rental property or joint bank account), you can read about how this income is taxed on our page Joint property on death.

Where you have evidence that the deceased had sold an asset, you may also need to consider capital gains tax.

Self assessment tax returns

It is not always necessary to complete a self assessment tax return for the deceased. You can check guidance on GOV.UK to see whether tax returns need to be completed. 

If tax returns are needed, they need to be signed by the personal representative.

If no tax return is needed

If no tax return is required, it is still necessary for the deceased’s tax affairs up to the date of death to be finalised. 

To do this, HMRC will send a letter to the personal representative or – if not known – the last known address of the deceased. The letter should explain the process of reconciling the tax affairs of the deceased up to the date of death and that a P800 tax calculation or a simple assessment will be sent, once HMRC have received the final income and tax information from the pension providers, employers, Department for Work and Pensions (DWP), etc. The personal representative should advise HMRC of any savings or property income or capital gains.

Be aware that the deceased may have more than one tax year to be finalised, especially if for example they had been ill and had neglected their tax affairs for some time.

A full personal allowance is available for the tax year of the death to set against income arising before the date of death. If the deceased had earnings or pensions that were taxed under pay as you earn (PAYE), it is likely that they will have paid too much tax in the tax year of their death. This is because under PAYE, you are only given part of your tax-free personal allowance each month as the system assumes that you will be paying tax evenly across the entire year. When HMRC issue the P800 tax calculation it will show any refund due. 

In some cases, it is possible there will be underpayment of tax that will need to be paid out of the deceased’s estate. Tax debt would usually be written off if there are no estate assets.  

The personal representative must check the P800/simple assessment calculation against the deceased’s records. If they do not agree with it, they should contact HMRC as soon as possible. They should pay particular attention to entries such as a bank interest – while this information is normally passed to HMRC from banks and other third parties, the entries included on the tax calculation could contain estimated figures and may not always be accurate. 

Paying tax and tax refunds

Tax up to the date of death should be paid out of the assets of the estate by the personal representative. A bank may be prepared to make payment direct to HMRC for this purpose. If there are no funds available at that time, for example because probate has not been granted, the personal representative may need to arrange a loan to pay the tax due.

If there is a refund due to the estate, the refund will be payable to the estate.

Time limits

Any tax returns that have been demanded by HMRC should normally be filed by 31 January following the end of the relevant tax year.

However, we understand that where there are outstanding tax returns for the deceased, HMRC advises executors to contact them. HMRC should then cancel any outstanding tax returns that were issued to the deceased and re-issue them to the personal representative, together with a tax return to the date of death.

HMRC will not accept electronic tax returns from personal representatives for deceased taxpayers. Paper tax returns therefore have to be filed. Alternatively, a tax agent, if appointed by the personal representative, can file electronic returns using third party software. 

HMRC will usually give a deadline of 3 months and 7 days for the executors to submit any re-issued tax returns. HMRC’s guidance (see HMRC’s self assessment manual SAM90010) also indicates that if an executor has difficulty meeting this deadline, they may agree an alternative reasonable filing date.

HMRC’s guidance (see SAM90010) also confirms that any outstanding late-filing penalties issued to the deceased should be cancelled. 

It makes sense to try and finalise the tax position of the deceased as soon as possible. You can ask HMRC to confirm that there are no further outstanding issues.

Getting help

To get professional help with tax matters for a deceased taxpayer, see Tax help on bereavement, trusts and estates.