Losing someone you care about is one of the hardest things you can go through and having to deal with tax matters on top of that can feel overwhelming. This guide is here to help you step by step.
What’s in this guide
- Step 1: Notify HMRC and DWP about the person’s death
- Step 2: Talk to HMRC so they can work out if the right amount of tax is paid
- Step 3: Check if you need to complete a Self-Assessment tax return
- Step 4: Paying Income Tax on the estate’s earnings
- Step 5: Apply for tax refunds or pay what’s owed
- Step 6: Check if you need to pay Capital Gains Tax
- Where to get professional help with tax after someone dies
Step 1: Notify HMRC and DWP about the person’s death
If the person who died lived in England, Scotland or Wales
You can use the Tell Us Once serviceOpens in a new window on GOV.UK.
The Tell Us Once service is there to make things a little easier. It lets you notify multiple government departments in one go, rather than having to contact each one separately.
Once you’ve used the service, departments like HMRC and the Department for Work and Pensions (DWP) will be in touch with you directly about any tax and benefits matters that need to be sorted.
If the person who died lived in Northern Ireland
You can use the Bereavement ServiceOpens in a new window on nidrect or call for free on 0800 085 2463.
Step 2: Talk to HMRC so they can work out if the right amount of tax is paid
As part of settling their affairs, you'll need to contact HMRC as soon as you can to make sure the right amount of tax has been paid. You’ll need to do this separately from the Tell Us Once service as contacting HMRC about tax is not included as part of that process.
Their estate (everything they owned and any debts they had) may owe tax to the government or be owed a refund. HMRC will adjust the tax calculation once you get in touch.
When someone you care about dies, you may see them referred to as “the deceased” in official documents. This is simply the legal term used. It can feel impersonal, but it’s just the formal language required.
Remember, sorting out tax is an important part of dealing with someone's estate HMRC's Bereavement Helpline can guide you through this processOpens in a new window
Step 3: Check if you need to complete a Self-Assessment tax return
If the person who died normally did a Self Assessment tax return, you might need to do one for them.
If they didn't normally do one, you won’t need to do one now.
If you’re not sure whether they did Self Assessment tax returns, contact HMRC (you'll need their National Insurance Number).
If you’ve used the Tell Us Once Service, HMRC will let you know if a tax return is needed.
When someone has died, there might be several years of tax returns that still need to be completed. This often happens when the person had been unwell and wasn't able to keep up with their tax responsibilities. This can be sorted out, and there’s support available to help during this difficult time.
Step 4: Paying Income Tax on the estate’s earnings
Money from savings accounts, shares, or rental properties won't have tax deducted beforehand, but it will still need to be reported and have tax paid on it.
After someone dies, this income becomes part of their estate. When someone is alive, they benefit from tax-free allowances such as the personal allowance, but estates do not get these same allowances. This means the tax bill could be higher than it would have been had the person still been alive.
Most income will be taxed in full, with the only exceptions being certain exempt types like Premium Bond winnings or ISA income.
The tax rates that apply to estate income are:
Savings income and rental income: 20% — So, for every £100 earned, £20 will be owed in tax.
Dividends from shares: 8.75% — So, for every £100 earned, £8.75 will be owed in tax.
If you’re an executor or administrator, you'll need to report this income to HMRC so the correct tax can be calculated and paid. This is part of probate — the legal process that gives you authority to deal with their estate.
Find out more in our section about applying for probate or confirmation in our guide What to do when someone dies and leaves a will
ISAs and tax relief
If the person who died had an ISA, it can continue to provide tax-free income for a limited time after their death. So, you won't need to include any income from it on a Self-Assessment tax return.
The ISA will keep its tax advantages for three years after the person died, unless:
the estate administration (the process of sorting out everything the person owned and owed before it can be passed on) is completed before then, or
if the ISA is closed.
Step 5: Apply for tax refunds or pay what’s owed
Once HMRC has calculated the final tax bill, you can either:
claim any tax refunds the person was due, or
pay any tax the person still owed.
Step 6: Check if you need to pay Capital Gains Tax
When assets like property or investments are sold as part of settling an estate, you may need to pay Capital Gains Tax if they’ve gone up in value since the person died.
Important: 60-day deadline for property sales
If you sell a property that belonged to the person who died, you must report the sale to HMRC and pay any tax owed within 60 days of completing the sale.
How is Capital Gains Tax calculated?
When someone dies, their assets are valued at that point. If you later sell something for more than that value, you pay Capital Gains Tax on the profit. You can deduct reasonable selling costs, such as estate agent or legal fees.
For example:
A property is worth £200,000 when someone died.
You later sell the property for £250,000.
You pay Capital Gains Tax only on your profit of £50,000.
The tax rate is 24% on profits from property and most other assets, including shares and valuable items like antiques or paintings. This works out as £240 for every £1,000 of profit. So in the example above, the tax bill would be £12,000.
If the value of an asset has gone down since the person died, the loss can be offset against the overall tax bill.
Find out more about Capital Gains Tax: what you pay it on, rates and allowancesOpens in a new window on GOV.UK
Where to get professional help with tax after someone dies
If the estate is complex, it's worth getting professional advice. You can find a qualified specialist through:
MoneyHelper: How to choose a financial adviser
If you're on a low income and need free tax advice, Taxaid can helpOpens in a new window
If you're aged 60 or over and on a low income, Tax Help for Older PeopleOpens in a new window offers free specialist advice.
