To think there is something immoral about this - Late Self Assement tax penalties in deceased Aunts estate?

[justgivemeamo]

So, I know nothing about self assessment tax and I am my Aunts executor. She passed away a month ago and we have had a £1,500 bill through totally made up it seems of late or no - self assement tax arrears.

Now she rented out a property but had massive issues with tennants for years and from at least last May had no rent at all from it.

If rent was coming in it would be about 700 a month. She had two meagre pensions, private 180 a month and state, and a few shares that could not have brought in more than a few hundred pounds dividends.

She was also pretty immobile and house bound for the last two years of her life with several reasons why she was immobile and was in and out of hosptial for long 2 - 6 week stays at a time.
The letter also said " interest is being added please pay now"

I mean I dont expect of all places the Tax office to morally proper but it seems really off to me, to be charging an elderly lady with a paltry income for late self assessment forms....she obv had no access to the internet and relied on her friend to all her running round for her! I have spoken to the tax office and they are going to look into it but I fear they are a tough department.

There is an appeal process for the penalties and you can ask for a review of the interest. The tax office are not psychic so if no one told them about her difficulties how can they be morally accountable?

Until she filed her returns, how would the tax office know if she had a paltry income or was rolling in it?

I don't see anything you have posted that would have prevented your aunt doing her tax return. Tax returns aren't new and ime HMRC are fair and helpful to people will small amounts of self employed income. Also, self assessments have never had to be done online.

I would contact HMRC to see what is what. Any fees and penalties incurred before her death will form part of the estate and it sounds like there is property to pay for them.

I'd stop whinging about a situation that is not or your or HMRC's making and start getting on with sorting it out. Your blame is misdirected.

I do have some sympathy for you being landed with the job of sorting out the mess and hope it's not too onerous.

Yes thats very true. I know she had written in many years ago explaining hospital visits and that she had also done Tax returns, so they would have an idea of her amount of income - ie - meager pensions, meager capital with her main income being rent from her house.

Ie, She isn't a millionaire with huge portfolio etc. For all I know she may have tried to tell them.

I know I tried to phone the DVLA on her behalf ages ago to explain she was in hosptial and breathless and found talking hard and they refused to even take any message from me at all - they then fined her for not declaring car off the road.

Any fees and penalties incurred before her death will form part of the estate and it sounds like there is property to pay for them

If she owes money from income to the tax office - I agree with that, But I feel there is something immoral about charging her for late or non filing of tax return when she was struggling so much. Ie fines are generated from her simply being unable to look after herself anymore, rather than actual money she owed on what she earned.

And she had no real income either

I'd stop whinging about a situation that is not or your or HMRC's making and start getting on with sorting it out. Your blame is misdirected.

^^ I have called them!

Tax returns aren't optional.

If she was unable to manage her affairs she could have sold up/stopped renting out the property or asked someone else to manage her affairs. All of which would have eventually ended the need for a self assessment.

I know you have called them. That's only the first step though. The next one will be to try to unpick the mess of what should have been on the tax returns.

I'm sorry for you - it's going to be a pig to sort out.

Moving, there was a million things she should have and could have done to improve the quality of her life before she passed away. But she was in tremendous pain most days and unable to leave her flat. She was also in denial about her condition .

I and many other people tried to get her to sell the property but she was adamant she would loose the capital and potential rental income. She thought she would be left destitute. Also she was desperate to hang onto it to pass to her DS.

You sound very clear cut MOving, many people are not like that. I am sure she had her reasons.

I'm sorry for you - it's going to be a pig to sort out

Well this is why I posted, I hope someone with experience will come along and give me some useful tips.

enlist the help of a professional to help you deal with it all

i dont know how you expect hmrc to have details of her life and difficulties so they are not to blame

I'm sorry she was in pain and in denial. That must have been very difficult for everyone involved.

She made a bad decision, motivated by the desire to pass on her property to her son. That's not the fault of HMRC and I would feel forgiving towards your aunt (while being cross at the mess left to sort out) because of the circumstances.

Was the property let my a management company? Do they have any records?

Gather copies of your aunt's bank statements to show income and expenditure related to the property. I would get hard copies and go through with a highlighter to identify anything that might relate to the property.

Copies of previous tax returns might help too.

Did your aunt have an accountant?

TBH I'd probably see if an accountant would take the job on and process the bill as an expense of the estate if it's more than a year or two or if it's causing you stress.

If she's been in hospital and/or generally not capable of preparing or arrange for her returns to be prepared, you may well have grounds to appeal the penalties on the basis of her having a reasonable excuse. From what you've wrote, I would suggest you would have a good chance of success, particularly if there was little or no tax due.

The penalties are issued automatically - no one at hmrc will be sitting thinking 'hang on, this lady is quite elderly and doesn't have much income - let's not give her a penalty'...for obvious reasons.

You will need to bring her affairs up to date, though, and quantify any debt that's outstanding. I would suggest getting an accountant involved.

By not my

Call them, the people who answer the phone are really clued-up and helpful. They can put notes in the account right away, though nothing will change until the correct forms are supplied. They can, of course, help you to understand what forms to use.

I found them very easy to get through to early in the morning, think opening time is 8:30-am

Gather copies of your aunt's bank statements to show income and expenditure related to the property. I would get hard copies and go through with a highlighter to identify anything that might relate to the property

Good idea! Thank you Sadly no accountants or professionals or solicitors.

clash thank you. There is little capital left and she has made several large behests as well. I don't think the estate could afford an accountant - when the sum the Tax want is £1500.

Have you spoken to HMRC? If you offer to pay all the tax that is owed they might be prepared to waive the late charges. If they refuse to do this then the estate will have to pay the penalties she has incurred.it might seem unfair, but if they always make allowances for everyone who gets into a muddle with their tax returns then it would become a free for all .

If she has a ds why isn't he sorting all this out or been involved in making sure tax returns were done?

finally I don't know why but I have a tremendous fear of the tax office. The person I spoke to was helpful and even apologized for the letter saying " interest is accumulating please pay now". He also asked me " do you know why your aunt is doing tax returns in the first place" and said some one would look into it.

Don't forget the liabilities with hmrc will need to be settled before bequests are paid out.

I suspect an accountant will save more than it will cost, particularly if they manage to get the penalties cancelled.

I think much of the fear in HMRC is misplaced. Having had quite a lot to deal with them recently I found them to be polite and helpful.

In fact I had to sack my bad accountant and do the return myself and HMRC were brilliant.

I was afraid of them before that but not now :)

Ds lived abroad and took little interest in her sadly He wasn't made executor either.

I dont mind sorting her affairs out, I loved her - and any actual tax owed will gladly pay just felt - charging her for being ill was a little off - however Yes of course understand they are not mind readers....

Thats really really good to hear Moving!!

:) Hope it all goes well and feels a bit more manageable now

I wouldn't speak to them on the phone op, I would write.

Dh was in a similar situation a few years back and dh had fines of around £1k for not doing SA's on time...buried our heads in the sand at the time for various reasons so it was a situation of our own making really.

Anyway, we wrote a long letter of explanation/apology, citing the 'exceptional' reasons for not filing them, personal difficulties etc. Had a letter back two days later and they'd wiped them all...it was a bog standard, robotic sounding three line letter saying as a gesture they had wiped them. So it seemed like it was a common scenario and maybe that was preferred to having to chase payment plans etc for those that were struggling with fines.