HMRC warning over taxes on pensions

HMRC warning over taxes on pensions

HMRC have shared advice on how to ensure all taxes are correct after receiving a query following the death of a pensioner. A man reached out to the tax body with inquiries about the regulations for someone who had passed away earlier this year.

He asked: “If HMRC has been notified that someone died during the last financial year, and HMRC has not sent any communication or tax return form for the part of the financial year when the person was alive, is any further action needed to pay income tax up to the date of death?”

The tax authority asked the man to describe the deceased individual’s income and tax circumstances up to their passing and whether a P45 could be produced. The man stated: “A retired person aged 82, total income above the personal allowance (in the basic rate band) from state pension, modest private pension, and dividend income.

“Always used to complete tax returns. I don’t have the records; asking on behalf of another family member.” Following this, HMRC questioned whether the department had demanded a tax return.

A man contacted HMRC with a query about tax on pensions -Credit:Getty

In response, the individual said: “In past years she was always sent and completed a paper tax return form because of the dividend income. This spring (after notification of her death in January) no self-assessment form was sent, and no request has been made for a tax return for April 2023 to January 2024.”

The Government organization then asked whether the man was the executor and if he had received any statements from the pension providers. He stated that he wasn’t the executor, but he could discuss the pension details with the executor.

HMRC responded: “No further information would be needed if they have all the required documents.” The man reached out to HMRC again the following day, stating: “I’ve now found out that, although the person completed a tax return each year, it was a zero return. She has had no income tax to pay for years, ie her income was within her personal allowance and thresholds.”

I have suggested that this might be why she hadn’t received a tax return to complete this year for the period from April 2023 until her death. An HMRC representative replied: “That could be the case however to confirm, the executor would need to contact the helpline directly please.”

The group then directed him to the ‘Self Assessment: general inquiries’ page on the Government website.