Your late aunt appointed you as the personal representative\nof her estate, but when sorting through her paperwork, you discovered she had\nrental income from letting out her old home, after moving into residential care.\nHowever, your aunt did not declare this income to HM Revenue and Customs. What\nshould you do?<\/p>\n\n\n\n
As your aunt\u2019s personal representative, it\u2019s your responsibility\nto collect details of her assets and liabilities at the date of her death, and declare\nthem to HMRC for all taxes, not just inheritance tax.<\/p>\n\n\n\n
HMRC has introduced a \u2018Let Property Campaign\u2019 to make the\nprocess simpler. This gives taxpayers the opportunity to report undeclared\nrental income and expenses, and pay any tax owed. You will also benefit from\nmore favourable tax terms using this system.<\/p>\n\n\n\n
To take\npart in the Let Property Campaign, you should:<\/p>\n\n\n\n
When you\nnotify HMRC, you will receive a Disclosure Reference number (DRN) and Payment\nReference number (PRN). You then have 90 days from HMRC\u2019s acknowledgment to\nmake a full disclosure and pay any tax owed.<\/p>\n\n\n\n
Yes, you can claim expenses including fees for professional services, such as a letting agent or accountant, insurance, and repairs. It is also possible to claim for loan interest, if there is a mortgage outstanding, though this is now restricted for residential properties, but not commercial properties. If in any doubt, you should seek professional advice<\/a>.<\/p>\n\n\n\n\n\n HMRC will currently charge you interest at 7.75 per cent on any tax paid late. This is not a penalty, but \u2018commercial restitution,\u2019 as your aunt had the use of money which was owed to HMRC.<\/p>\n\n\n\n As her personal representative, you\nwon\u2019t normally be liable for penalties for any irregularities in her tax\naffairs.<\/p>\n\n\n\n In theory, HMRC\ncan go back 20 years under the Let Property Campaign. However, for a deceased\ntaxpayer, this will probably be limited to the \u2018in-date\u2019 tax years, which will be\nthe four previous tax years.<\/p>\n\n\n\n Katie Buckley TEP is a Director of The Tax Angel<\/a>\u00a0Consultancy Limited<\/em><\/strong><\/a><\/em><\/strong><\/p>\nDo I have to pay interest on the tax owed, and are there any penalties for late payment?<\/h2><\/p>\n\n\n\n