When the estate must report income to HMRC, how to register, what the SA900 Trust and Estate Tax Return covers, income tax rates, CGT rules, and R185 beneficiary certificates.
This guide is part of ProbateHelp's Inheritance Tax guide cluster.
Also searched as: estate income tax s a900.
Frequently asked questions
The estate only has a savings account earning a small amount of interest. Do I really need to report it?
For income arising from 6 April 2024, an estate does not need to report estate income of £500 or less in a tax year. If total estate income exceeds £500, the personal representatives must report the full amount using the applicable route. Check the balance and interest rate before assuming you're under the threshold. A £50,000 savings account at 4% earns £2,000 a year, which is well over the threshold.
Does the estate need a UTR if I'm using the informal arrangement?
No. Writing to HMRC under the informal arrangement does not require an estate UTR. If the estate later becomes complex, register it and use the estate UTR for the tax years that require SA900 returns. Once registered for Self Assessment, the estate cannot switch back to informal reporting during the same administration period.
Can an estate switch back to informal reporting after registering for Self Assessment?
No. HMRC says the reporting position applies across the whole administration period. An estate can move from informal reporting to Self Assessment if it becomes complex, but once registered it remains in Self Assessment until the administration period ends. Earlier years that were properly dealt with informally do not need retrospective SA900 returns simply because the estate later becomes complex.
The deceased had a UTR for their own Self Assessment. Can I use that for the estate?
No. The deceased's UTR belongs to them as an individual and is used for their own tax affairs. If the estate must register for Self Assessment, it receives a separate estate UTR. An estate using the informal arrangement does not need a UTR for that route.
How long does HMRC take to send the estate UTR?
GOV.UK says HMRC will send the estate UTR within 15 working days after the estate has been registered. Build that wait into the timetable because you need the estate UTR before filing the SA900.
Administration has dragged on for three years. How does that affect the CGT exemption?
The estate gets the full £3,000 CGT annual exempt amount for the tax year of death and the following two tax years — three years in total. After that, no further exemption is available. If you're approaching the end of year three and there are still assets to sell, it may be worth considering whether to sell them before 5 April to use the final year's exemption.
Do I need to issue an R185 to every beneficiary?
Give form R185 (Estate Income) to a beneficiary when you pay or distribute estate income to them. It shows the income and tax treated as paid so the beneficiary can use the figures in their own tax position. A person who receives capital only does not receive an R185 merely for that capital.
What are the estate income tax rates for 2026–27?
For dividends received on or after 6 April 2026, estates pay income tax at 10.75%. For other income, including interest and rental income, estates pay 20%. Estates do not get personal, savings, or dividend allowances, so taxable income is charged from the first pound once the reporting threshold is exceeded.
Can I deduct the cost of an accountant from the estate's income?
Paying an accountant from estate funds does not by itself make the fee deductible in the estate’s Income Tax computation. Apply the deduction rules for the underlying source, such as allowable property-business expenses. HMRC’s separate management-expense rules can affect the residuary beneficiary income calculation; obtain advice on mixed fees.
What if I discover after distributing the estate that there was income I didn't report?
Contact HMRC promptly, explain the omission and follow its correction or disclosure instructions. If the estate has already been distributed, obtain advice about the estate's liability and the personal representatives' options before seeking money from beneficiaries.