Income Tax Refund for a Deceased Person: How to Claim From HMRC

Claiming a tax refund for someone who has died is one of the most commonly overlooked steps in estate administration. Because PAYE operates on a monthly basis, a person who dies at any point before 5 April will almost certainly have overpaid income tax for the tax year. Claiming this money back is relatively straightforward and can add meaningfully to the estate — the average PAYE refund on death is typically in the hundreds of pounds.

Why Income Tax Refunds Arise After Death

The UK PAYE system deducts income tax from wages and pension payments on the assumption that a person will earn income throughout the full tax year (6 April to 5 April the following year). Each monthly pay packet deducts one-twelfth of the annual tax due.

The personal allowance (£12,570 for 2024/25 and 2025/26) is similarly spread across 12 months. So each month, the employee or pensioner is entitled to approximately £1,047 of tax-free income.

When someone dies mid-year, the remaining months of the tax year go unused. But the tax that has already been deducted was calculated on the assumption that no further allowances would be available — which is now incorrect. The result is almost always an overpayment of tax for the year.

For example, someone who dies in September having received PAYE income from April to September will have had six months of allowance used (£6,282). They are entitled to the full year's allowance of £12,570 in that year. The remaining £6,288 of unused allowance means that some or all of the tax deducted in earlier months may need to be refunded.

How to Claim: Form R27 and Writing to HMRC

There are two ways to initiate a tax refund claim for a deceased person:

Option 1: Form R27

Form R27 ("Reclaim tax when someone dies") is HMRC's dedicated form for this purpose. It can be downloaded from HMRC's website. The form asks for:

• The deceased's full name, date of birth, and date of death
• Their National Insurance number
• Details of income received in the tax year — wages, pension payments, state pension, and any other sources
• Details of any tax already paid (P60 or P45 figures, if available)
• The executor's or administrator's name and address for correspondence and payment

Option 2: Write to HMRC

If a P45 has been issued by the deceased's employer or pension provider — which should happen automatically on notification of death — HMRC may already have enough information to calculate the refund without the executor needing to complete a full R27. In this case, a letter to HMRC's Bereavement team, enclosing the death certificate and confirming that you are the executor, may be sufficient to trigger a review and repayment.

Write to HMRC at: HMRC, Pay As You Earn and Self Assessment, BX9 1AS. Include the deceased's name, National Insurance number, date of death, and your own details as executor. Keep a copy of everything you send.

What HMRC Calculates and How the Refund Is Paid

Once HMRC receives the R27 or the letter from the executor, it reviews the deceased's tax record for the year of death. HMRC will:

• Calculate the total income received in the year up to the date of death
• Apply the full personal allowance for the tax year (not just a pro-rated portion — the full £12,570 allowance is available for the entire year regardless of when the death occurred)
• Calculate the correct tax liability and compare it to the tax already paid
• Issue a P800 or similar calculation showing the overpayment
• Pay the refund to the executor at the address provided

HMRC typically pays refunds by cheque made payable to "The Estate of [Deceased's Name]". The cheque should be paid into the estate bank account and then distributed as part of the estate.

The Risk of Distributing the Estate Too Early

One of the most common errors in estate administration is distributing the estate to beneficiaries before all income, debts, and tax liabilities have been settled. An income tax refund is an asset of the estate — it belongs to the beneficiaries, not to the executor personally.

If the executor distributes the estate before the HMRC refund arrives:

• The refund cheque will arrive addressed to the estate, but the estate account may already be closed
• The executor may need to reopen the account or arrange for the cheque to be re-issued — HMRC will usually cooperate if contacted
• If the estate has been fully distributed and a tax liability then emerges instead of a refund, the executor may be personally liable for that tax — executors cannot simply call back distributed funds from beneficiaries

Best practice is to wait until HMRC has confirmed the tax position for the year of death — and ideally for any earlier tax years where issues may be outstanding — before making a final distribution. A prudent executor retains a sum in the estate account as a tax reserve until HMRC clearance is obtained.

How Long HMRC Takes to Process R27 Refunds

HMRC's published processing time for R27 refunds is typically six to eight weeks from receipt of the completed form. In practice, this can vary considerably:

• Claims made between January and April (the busy self-assessment season) may take longer — sometimes ten to twelve weeks
• Claims where there are complex income sources, multiple PAYE employers, or unresolved tax coding issues may require additional correspondence before the refund is issued
• Claims that follow up a self-assessment return filing may be processed alongside the return and take longer

If eight weeks have passed without a response, the executor can contact HMRC's Bereavement helpline (0300 200 3300, Monday to Friday, 8am to 6pm) to chase the claim. Have the deceased's National Insurance number and the date the R27 was submitted available when calling.