First-tier Tribunal (Tax)

Form R27.

“The estate of the late…..

I have sent you this form so that I can finalise the tax position up to the date of death. If you are dealing with the deceased’s estate please complete this form. If you are not, please give it to the person who is. They will normally be called the personal representative or Executor and may be a solicitor or accountant. It is important that this form is completed and signed by the personal Representative and not by an agent or professional adviser acting on their behalf.

COMPLETING THIS FORM

Page 1 You must complete Details about the estate and period of administration in every case.

Page 2 You must complete Details about income and allowances in every case unless you have already sent me a Self Assessment Tax Return or R40 claim form covering the period 6 April to the date of death, or you want to complete one now (in which case please tick the box at the top of page 2 that applies and I shall send one).[The italics are ours and are referred to later in this decision]. The details that you give on page 2 will help me work out the final tax liability.

Page 3 It is possible there may be a repayment of tax. To enable me to make the any repayment due, you must complete Claim to Repayment in every case unless you have already sent me a Self Assessment tax return or R40 claim form covering the period 6 April to the date of death.

Page 4 You must complete the Declaration in every case.

You should only complete Repayment nomination if you are the person entitled to receive any repayment which may be due, but you want to have the repayment paid direct into your bank or building society account or you want to n0minate someone to receive the repayment on your behalf.

Details about the estate and period of administration

[We do not propose to supply this information as the form merely has boxes for the appropriate information to be inserted.]

Details about the income and allowances

·       If the deceased normally completed an annual Self Assessment tax return or R40 claim form and you would prefer to complete one of these now for the period 6 April to the date of death please tick the appropriate box and I will send you one.

·       If you choose not to fill in a Self Assessment tax return at this time you may still need to complete one and send it to me after the end of the tax year (5 April) in which death occurred. But to help me to decide and let you know if this will be necessary, please complete the rest of this page and pages 3 and 4. (Our italics).

·       If you decide to complete a Tax return or R40 claim form now you need only fill in pages 1,3 and 4

·       If you have already sent me a Tax return or R40 claim form you need only fill in page 1 and the declaration at page 4 and then send this form back to me

  Income for the period 6 April 200 to (date of death)

Allowances and tax credits for the period 6 April 200  to 9date of death)

Claim to repayment.

(There then follow sections and boxes so that all this information can be completed.)

The form finishes with:-

Reasons for claiming Repayment

I am an executor named in the deceased’s will [A ]

I am an administrator named in the letters of administration [B ]

I am the widow/widower/surviving civil partner of the deceased [C ]

I paid all or some of the funeral expenses out of my personal resources [D ]

Other reasons [F ]

·       If you have ticked only box D and/or Box E you must give the following information

1.     What is you relationship to the deceased?

2.     Give names and addresses and relationship to the deceased of all known surviving relatives. Use a separate sheet of paper if necessary.

3.     If you ticked box D|, who else apart from yourself contributed to the funeral expenses? The estate? [] Someone else? []

4.     If they were paid partly by someone else, please enclose a letter form that person confirming that they have no objection to you receiving the repayment due to the estate

5.     If you ticked box E what is the reason for claiming the repayment? Use a separate sheet of paper if necessary.

There then follows details for the repayment and the form finishes with:-

  Declaration

  This form is signed by the Personal Representative or Executor of the deceased in every case. If you are acting on their behalf they can nominate you to receive the repayment due if appropriate (Part1 or Part 2).

I understand that if repayment of income tax or capital gains tax is made to me or my nominee

·       I will be responsible for dealing with the repayment as part of the estate  of the deceased and settling the claims of any other person who is entitled to share in the estate.

·       my name may be given to any other person who has an interest in the deceased’s affairs, and who asks HM Revenue & Customs about the tax repayment due to the estate. I authorise HM Revenue & Customs to provide this information only after I have been advised of the request.

·       and if someone else obtains probate, confirmation or letters of administration in respect of this estate, I will notify HM Revenue & Customs without delay, and if requested I will return immediately the tax repayment which I have received.

·       all arrears of tax and National Insurance contributions for periods up to the date of death will be satisfied out of any overpayment including any amounts that under the rules of Self Assessment are not yet legally due. (Our italics).

I declare that the information I have given on this form is correct and completed to the best of my knowledge and belief.

Your signature [ ]

·       They are all headed as a “Calculation” and reveal as to the first “Calculation” a repayment of tax of £1,604.17, with a repayment supplement of £2.21, making a total of £1,606.38.

·       As to the next showing a figure of £1,774.67 as due by way of repayment an additional repayment of £141.51, which included a repayment supplement but was reduced by the earlier payment of £1,606.17

·       A final “calculation” showing a figure of £1,841.47 as due by way of repayment  with a balancing cheque for £18.74.

“ an appeal had to be made within 30 days from the notification of the decision, such as the tax calculation or amendment.. As the time limit has expired you can ask us to accept your appeal out of time”.

This letter was incorrect as there was no appealable decision.

The decision.

20.  We have considered the law and the facts and we have decided that the ‘calculation’ is not an assessment and that this Tribunal has no jurisdiction to hear the appeal.  Section 30 A (1) of the Act states that:

“Except as otherwise provided, all assessments to tax which are not self-assessments shall be made by an officer of the board….”

Section 30 A (3) of he Act states that:

“the assessment must include “the time in which any appeal against an assessment must be made..” and

Section 113 (3) of the Act says that HMRC must prescribe the form to be used for an assessment. And that no individual should be required to make more than one annual return.

Section 114 of the Act is only of any assistance in allowing an assessment to be accepted as such, if it is obvious that there has been a recognisable error and its substance has not been affected. As a result, Section 114 could only be used in relation to a ‘calculation’ if it is an assessment.

21.  Whether the ‘calculation is an ‘assessment’ or not can only be considered against the background of the existing law. Form R27 is designed to help personal representatives or administrators to complete a tax return for a deceased. We suspect that in the majority of cases the tax position of a deceased will be straightforward.  He or she may only have a state and a private pension and some interest in the form of dividends or bank interest. It is for that reason that the individual is asked whether he or she wishes to put in a Self- Assessment Return or rely on a ‘calculation’ provide by HMRC. The form makes it clear on page 2 that if a Self Assessment Return is to be lodged then the box at the top of the page is to be ticked.

21. The form goes on to say under ‘Details about the Estate…’:

·       If you choose not to fill in a Self Assessment tax return at this time you may still need to complete one and send it to me after the end of the tax year (5 April) in which death occurred. But to help me to decide and let you know if this will be necessary, please complete the rest of this page and pages 3 and 4. (Our italics).

From this note it appears that HMRC can insist on a Self-Assessment Return if it considers that the case warrants it. We are surprised that HMRC did not so decide in view of the 10 private pension arrangements that the deceased had. This is the more so, when it became clear that the certificates relating to the tax position issued by one of the pension providers turned out to be incorrect.

22. Form R27 also anticipates that a claim for any tax repayment can, with the consent of the personal representative, who has to sign the form, be paid to the person or persons who paid the funeral account. That person has to confirm, on receiving the repayment, that he or she will repay it, if probate is issued to someone else and the payment may have been made improperly. It seems to us that such a person would be unlikely to know what the tax affairs of the deceased might have been, which gives rise to the possibility that the ‘calculation’ might well be incorrect and unreliable further reducing its potential status as an assessment.

23. The ‘calculation’ of the tax repayment has been amended twice from an initial repayment of £1606.38; to a further amount of £141.51; and a final payment of £18.74. As Mr Taylor submitted:

“No doubt in many cases the astute taxpayer would write to HMRC with the necessary information or corrections, and the disagreement would be resolved in correspondence.”

Form R27 allows amendments to be made to the ‘calculation’. The ‘calculation’ provided by HMRC does not include the time in which any appeal against the ‘calculation’ must be made, nor is it a form prescribed by HMRC as an assessment as required b y section 30 A (1) of the Act. 

24. What is the position under self-assessment? A Self-Assessment Return contains all the information requested in form R27 and much more. The taxpayer can either him or herself calculate the tax or ask HMRC to do so. As the Return is completed on line, the software can calculate the tax and HMRC can in all Returns either accept that the tax has been correctly calculated or disagree. As a result amendments can be made, as identified by Mr Taylor in relation to the ‘calculation’. If agreement cannot be reached then HMRC can raise an enquiry under section 9A of the Act. A taxpayer can ask for the enquiry to be closed and if it is HMRC can then raise an assessment as to the amount of tax it believe should be paid. Otherwise HMRC may raise an assessment at the end of its enquiry. Up to that point the tax payer has had no right of appeal. In fact, no appeal can be brought by a taxpayer until he or she files a Self-Assessment return. In more complex cases, HMRC can make a discovery assessment, which can then be appealed by the taxpayer.

DAVID S PORTER

TRIBUNAL JUDGE

RELEASE DATE:  10^th September 2013