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. Estimated reading time: 12 min.
Also searched as: estate income tax s a900.
If the total income from all sources in a given tax year is £500 or less (from 6 April 2024 onwards), you don't need to report anything. If it's over £500 — even by a penny — you must report all of it. 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.
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.
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.
No. The deceased's UTR belongs to them as an individual and is used to file their final personal tax return up to the date of death. The estate is a separate taxable entity and needs its own UTR, obtained by registering the estate online. Using the wrong UTR will cause HMRC to misallocate the return.
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.
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.
Only to beneficiaries who received income from the estate — not those who only received capital, for example someone who inherited a lump sum from a bank account. If a beneficiary received rental income, interest, or dividends that the estate paid tax on, they need an R185 to reclaim any overpaid tax. It's good practice to issue one to every income beneficiary even if you think they won't claim — it protects you as executor.
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.
Yes. Reasonable professional fees for preparing the estate's tax returns are an allowable expense and can be deducted from the estate's income before calculating the tax due. They can also be paid from estate funds before distribution to beneficiaries.
Contact HMRC as soon as possible and make a voluntary disclosure. HMRC's approach to executors who come forward proactively is generally more lenient than to those who are discovered. If the estate has already been distributed, you may need to recover funds from beneficiaries — which is why it's worth getting the tax position right before making the final distribution.