Tax Responsibilities of Executors: What You Need to Know

Our experienced solicitors can help you deal with the tax affairs of the deceased. Below is a breakdown of the potential tax responsibilities you may face as an executor:

Register the Estate with HMRC (If Required)

If the estate is complex — for example, it earns ongoing income, has capital gains, or is liable for Inheritance Tax (IHT) — you’ll need to register the estate with HMRC in order to manage its tax affairs.

You won’t need to register if the estate is considered ‘simple’ (for example, when there are no complex income streams), but many estates do require registration, especially if they generate income before assets are distributed.

Submit the Final Self-Assessment for the Deceased

As executor, you must submit a final Self-Assessment tax return for the deceased, covering the period from 6 April until the date of death.

This return should include:

• Salary or pension income
• Investment income (interest, dividends)
• Capital gains
• Property or self-employment income

Note: Even if the deceased was not previously submitting Self-Assessment returns, you may still need to contact HMRC to determine whether one is required.

What if tax is owed?

Any unpaid tax must be settled from the estate before distributing assets to beneficiaries.

Report and Pay Inheritance Tax (IHT)

Inheritance Tax is one of the most important — and often complex — parts of an executor’s responsibilities.

Executors must:

• Complete and submit Form IHT400 (or Form IHT205 if it’s a simpler estate).
• Pay any tax due, usually within six months of the date of death to avoid interest charges.
• Obtain a Grant of Probate only after the initial IHT is paid or agreed with HMRC.

File Estate Tax Returns (If Income Is Generated or Gains Are Made on the Sale of Assets)

If the estate earns income — such as rental income, interest, or dividends — or realises capital gains during the administration period, you may need to:

• File an annual Trust and Estate Self-Assessment return
• Pay any Income Tax or Capital Gains Tax due

Obtain a Clearance Letter from HMRC

Once all taxes have been paid and all returns submitted, it is advisable to request a clearance letter from HMRC. This confirms that no further tax is owed and provides the executor with peace of mind before distributing the estate.