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Sam
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Category: Tax
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SamIn addition to my question about the Tax Return for

Resolved Question:

Hi Sam

In addition to my question about the Tax Return for my mother in law, my sister in law has told me that she has just found out that she has overpaid tax for my mother in law over the last few years. She was in receipt of some benefits, one of which my sister in law did not realise already had tax deducted at source so she put down the amount to have tax calculated on it. I understand the true annual income was approx £17,000 and the amount she put down was £21-£22,000.

Now my mother in law has passed, will it be difficult to try to reclaim tax paid and how should she go about doing this?

Many thanks.

Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your further question
Then amendments will need making to ask for the tax suffered to be taken into account, but usually HMRC will only consider back 3 tax years - so when the 2014/2015 tax return is submitted and the part year position for 2015/2016 (from 06/04/2015 to date of passing) then also ask for the correct benefit and tax suffered to be taken into account
Although I will advise benefits do not usually have any tax deducted - as the DWP cannot operate any PAYE tax deduction system - so do be sure there has been tax deducted at source from this specific benefit.
Let me know if I can be of any further assistance
Thanks
Sam
Customer: replied 2 years ago.

Hi Sam

I will find out which benefit it is, perhaps I misunderstood and it is income of some sort such as pension, I will find out.

How would we go about asking for the tax suffered to be taken into account? Would we need to recalculate everything or would HMRC calculate this for us and what is the procedure to go about asking for the last 3 years returns to be reviewed? Are there specific forms and documents that need to be filled in?

Many thanks

Expert:  Sam replied 2 years ago.
Hi
That would be great and then I can advise further.
You do not need to recalculate anything - you would write to HMRC (just a letter drawn up making this specific request) with the amended information (along with the 2014/2015 tax return and the one for the year Mother in law passed away (06/04/2015 to date of passing) and HMRC would deal with this ALL in one go.
Thanks
Sam
Customer: replied 2 years ago.

Hi Sam

Sorry for the delay, I am waiting for my sister in law to return from holiday to find out exactly what income/benefit she thinks she has overpaid on and will let you know as soon as I speak to her.

Thanks for your patience and as always, your invaluable help and advice.

Mary

Expert:  Sam replied 2 years ago.
HI Mary
That's is fine - I shall watch out for your response when your sister is law is available to advise you further
Have a lovely weekend
Sam
Customer: replied 2 years ago.

Hi Sam

I hope you are well and enjoying your weekend. If you are busy today, there is no need to reply today as I appreciate it is the weekend and you probably want some family time and have things to do so tomorrow is fine!

My sister-in-law is now back and has confirmed that she included as part of the total income, Attendance Allowance as part of the State Pension received. She said she thinks she shouldn't have included this as Attendance Allowance is tax free and this increased the income stated by quite a lot (I think the Attendance Allowance was paid at the higher rate). She said this was included in the 2012/13 and 2013/14 returns.

If she is able to reclaim overpaid tax on this, please can you kindly advise how the letter should be written (how it should be phrased) as she is quite anxious about getting this right and doesn't know how it should be written.

Please let me know if you need any further information.

Many thanks

Mary

Expert:  Sam replied 2 years ago.
Hi Mary
Thanks for your response and I am Having a great weekend thanks - I hope you are too. And I tend to work every day - so its not a problem answering you today!
Attendance allowance IS tax free - so your sister in law is correct - I have added a link here that lists the taxable and tax free state payments
https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits
She can either
1) Amend self assessment tax returns if she completes these each year revising the correct figure OR
2) Write a letter that should state that
I make reference to the 2012/2013 and 2013/2014 tax returns on which she made a declaration for the state pension and also inadvertently included the attendance allowance figure (which is a tax free benefit) along with the state pension, and would like HMRC to amend the appropriate years
2012/2013 (advise the state pension figure only)
2013/2014 (advise the state pension figure only)
If they could then advise the revised tax calculations and pay any refund due, for any tax overpaid, it would be appreciated.
Do note that a letter can take up to 10 weeks to be reviewed so it might be quicker to amend the self assessment tax returns herself (if completed online)
Let me know if I can be of any furtehr assistance.
Thanks
Sam
I refer to the 2012
Customer: replied 2 years ago.

Hi Sam

Thanks for your prompt reply, I didn't expect you to look at this until tomorrow! I am having a lovely weekend too thanks, ***** ***** goes so quick!

That's great, thanks for confirming and advising on the wording, I think writing letters to the HMRC can seem a daunting task as although it is just a letter, we are worried about saying the wrong thing and causing unnecessary complications! I will pass this on to her.

She submitted paper returns and will be submitting paper returns for 14/15 and 15/16. Does that mean she can only amend the returns via this letter if she didn't complete online returns anyway? Would she also have to tick the box in the 14/15 return that she thinks she has paid too much tax and put details in that too?

Referring to your advice about sending in the 15/16 Return at the same time to deal with everything in one go, would she need to request HMRC to send the paper form for 15/16 as this has not been sent out yet?

Finally, will the overpaid tax be sent back as a cheque payment to my mother-in-law? I'm not sure on the process of probate but wondered if there would be issues paying the cheque into the account if it is frozen. My sister in law is the executor and is in the process of applying for probate. I am aware however that this may not be your area of expertise so may need further investigating.

Thanks again for all your help.

Best regards,

Mary

Expert:  Sam replied 2 years ago.
Hi Mary
Thanks for your response and the additional information - glad you are having a good weekend
Yes - as paper returns were completed, the request to amend these will still need to be in writing - and especially as mother in law has passed and your sister in law is now seeking to put matters right - this keeps matters all above board and dealt with all together!
I would not tick the box for 2014/2015 that tax has been overpaid, as she will in fact put the right information for 2014/2015 (just the state pension) so there should not be a refund arising for this issue for the year she is just completing the return for. If there is a refund then this will be dealt with in its own right away from the amendments needed for those earlier years.
The 2015/2016 return will deal with the final part of mother in laws affairs and there might be a refund if tax has been paid, as a full years worth of tax allowances are allocated to cover the income - but again she should not declare the attendance allowance.
Just make sure all that can be sent together is, but my advise is deal with those earlier years and 2014/2015 - by sister law as executor and then ask for the 2015/2016 return and R27 (details who the refund goes to) in that same letter to finalsie all mother in laws affairs.
And within her letter for the amendments for 2012/2013 and 2013/2014 she would ask for the refund (as advised above)
She can either
1) Ask that this be issued as a cheque to her (payable order) as executor for her late mother OR
2) Give her bank details, name of account, which bank, sort code and bank account number and they can pay into her account directly, as executor , and just send the calculations out to her and advise that the payment has been made into her account.
They may ask for form R27 to be completed first, but at least the refunds have been asked for and this is underway before the records are ceased due to the death of mother in law.
I hope this helps
Thanks
Sam
Sam and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Hi Sam

Thanks very much for your invaluable advice and help over this issue.
I'm sure this covers everything but if anything else arises out of this, I will raise as a separate question to you to ensure your time is compensated properly.

Have a lovely evening and thanks again.

Mary

Expert:  Sam replied 2 years ago.
Hi Mary
You are very welcome and please do rate the level of service with this question thread - much appreciated
Thanks
Sam