Q&A - Can I be held responsible for deceased benefactor's underpaid tax?

Q:  Two years ago I and another beneficiary who was also Executor, inherited equal shares of an uncle's estate. After gaining probate the Executor, who lived in the US, sadly died. I later received a demand from HMRC for several hundred pounds, an equal portion of monies purportedly owed to them by my uncle for underpaid income tax. I informed them of the other beneficiary's passing and now they say I am liable for what is owed in full. Can this be right?

A:  An Executor has a duty to pay all creditors out of the estate prior to applying for probate and distributing the assets. It would appear from what you say that the income tax was owed to HMRC at the time of your uncle's death but took two years to be collected. This being the case the Executor would not have known about it when he applied for probate.

Had the Executor still been living in the UK when he died it is likely that HMRC would have gone to the beneficiaries of his estate for payment of half your uncle's tax debt. You could request that HMRC try to locate your uncle's beneficiaries but if they are living in another country it is unlikely that they will move to do so.

In the first instance you should write to HMRC and request details of the unpaid tax to ascertain exactly why and when the underpayment occurred. As the amount due is hundreds rather than thousands they may agree to cancel the debt, but if you are forced to pay you should request confirmation from them in writing that this will be a full and final settlement and they will make no further demands in respect of monies owed by your uncle's estate. You would also be wise to seek legal advice before approaching HMRC.


Victoria Wilson

Victoria Wilson


A Partner and Head of our Probate, Wills, Trusts and Tax team