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We re-checked our most-read guides against GOV.UK and the other official sources in September 2026. This one was not among them, so nobody has confirmed its figures, deadlines or process steps since it was written. Treat it as a starting point and confirm anything that matters on GOV.UK before you act on it.
Yes. Income received during the administration period — such as bank interest, rental income, or dividends — is subject to income tax and must be reported to HMRC. This is estate income, taxed separately from the personal income of the executor. If the estate’s income from all sources is £500 or less in a tax year, there is nothing to report for that year. Above £500, most simple estates can still report informally by letter; only estates that fall outside HMRC’s informal conditions have to register the estate and file an SA900 Trust and Estate Tax Return.
One aspect of estate administration that often catches executors off-guard is the obligation to deal with income tax arising during the period between the date of death and the final distribution to beneficiaries. This can last months or even years in complex estates, and during that time any income the estate receives is taxable. This guide explains what you need to do, when it applies, and how to keep things manageable.
When the executor collects rent from a property in the estate, receives interest on the deceased’s bank accounts, or receives dividends on shares being held before sale, that income belongs to the estate — not to the executor personally. The estate is treated as a separate taxpayer for income tax purposes during the administration period.
This distinction matters for two reasons. First, the executor cannot offset estate income against their own personal allowance (£12,570 for 2026/27) — and the estate has no personal allowance of its own. HMRC’s manuals are explicit that personal representatives do not get personal allowances, so estate income is taxable from the first pound above the £500 de minimis. Second, the income is not reported on the executor’s personal self-assessment return — it is dealt with separately, in the estate’s name.
The administration period begins on the date of death and ends when the estate is fully administered — typically when all assets have been collected, debts paid, and distributions made to beneficiaries. In practice, many simple estates are administered within 6 to 12 months. Complex or disputed estates can take several years.
For income arising from 6 April 2024, GOV.UK puts it plainly: if the estate’s income from any sources is £500 or less, you do not need to report the estate to HMRC.
This is a per tax year figure, not a cumulative total across the whole administration period, and GOV.UK says expressly that you cannot carry over unused amounts from one tax year to the next. An estate with £200 of interest in one year and £350 in the next is under the threshold in both years and has nothing to report in either.
The rule before 6 April 2024 was different: reporting was only required where the income was bank interest and the tax owed on it came to more than £100. If you are dealing with income from an earlier year, that is the test that applies to it.
Even where income is below £500 and nothing is reportable, keep a record of what came in. Residuary beneficiaries are entitled to a statement of estate income, and you will need the figures if the position changes in a later year.
Common types of estate income that count towards the threshold include:
Important: Tax year end 5 April
Estate income is measured by tax year (6 April to 5 April), and the £500 threshold is tested separately in each one. Where a return or an informal report is required and administration spans two tax years, each year is dealt with in its own right. Finishing the administration before 5 April can sometimes avoid a second year’s reporting altogether.
Exceeding £500 in a tax year does not automatically mean an SA900. HMRC operates an informal payment procedure for simpler estates. Under TSEM7410, personal representatives may use it where all three of the following apply:
Where those conditions are met, you report by writing to HMRC with the estate’s income and gains, and HMRC works out the tax and tells you what to pay. There is no registration, no UTR for the estate and no SA900. That covers a large proportion of ordinary estates.
If the estate falls outside any of those three conditions, you must register the estate with HMRC and file a Self Assessment return for it:
The SA900 deadline is the ordinary Self Assessment one: 31 October after the end of the tax year for a paper return, 31 January for an online return. Late filing attracts the standard penalties, starting at £100. Tax owed by the estate is due by 31 January following the tax year, and late payment interest runs at the Bank of England base rate plus 4 percentage points.
The tax rates that apply to estate income during administration are the basic rates — not the punitive higher trust rates that apply to discretionary trusts. This is an important distinction that often confuses executors and advisers alike.
The 45% additional rate and the 39.35% dividend trust rate do not apply to estates in administration. They apply to discretionary trusts, which are a different legal vehicle. The trade-off is that an estate gets no personal allowance, no personal savings allowance and no dividend allowance: above the £500 de minimis, every pound of estate income is taxable.
Note that income tax already deducted at source (for example, tax deducted from bank interest or dividends) is taken into account when calculating the estate’s tax liability. Banks in the UK no longer routinely deduct tax from interest, but some investment income may still have tax deducted at source.
Keep a running schedule of all income received, broken down by type and tax year. Personal representatives are responsible for returning the estate’s income and gains and for paying the tax due on them, and a schedule is what makes that possible. It serves several purposes:
A well-maintained estate income schedule also protects you as executor if beneficiaries later query the figures. Keep bank statements, dividend vouchers, rental agency statements and other income documents with the estate accounts. HMRC does not publish a specific retention period for estates in administration; the practical answer is to keep them for as long as a beneficiary or HMRC could still raise a question about the figures, which is longer than most executors expect.
Getting professional help
The informal route handles most estates without an accountant. An SA900 is a different proposition: it is more involved than a personal self-assessment return, and estates with rental income, a share portfolio or an administration running across several tax years are where executors most often bring one in. Fees for preparing estate income accounts and the SA900 are an expense of the estate and can be paid from estate funds before distribution.
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