EIM42390 - Employment income: basis of
assessment for general earnings: earnings received after the death
of an employee or office holder: the charge on personal
representatives
Section 13(4) and (5) ITEPA 2003
If an employee or office holder dies and earnings are received
after the date of death, the personal representatives are charged
to tax on them (see
EIM42380). They are charged:
- at the basic rate only
- in the year the earnings are received (or,
where the special rules for certain foreign earnings apply,
received in the United Kingdom)
- without any allowances, deductions or
reliefs except for the deductions, reliefs and exemptions that
would have been due to the employee had they lived.
The personal representatives cannot claim deductions for
expenses that they incur separately themselves. The main deductions
due are therefore:
- expenses within Sections 336 to 338 ITEPA
2003 incurred by the employee or office holder (see
EIM31620 onwards)
- balancing allowances due to the employee
or office holder; balancing charges will also fall on the personal
representatives (see
EIM36500 onwards)
- foreign travel and accommodation expenses
within Sections 341, 342 and 370 to 376 ITEPA 2003 incurred by the
employee or office holder (see
EIM34000 onwards)
- professional fees and subscriptions within
Sections 343 and 344 ITEPA 2003 (see
EIM32880 onwards)
- where a lump sum is assessable under the
"golden handshake" provisions the various exemptions that are
available under Sections 404 to 414 ITEPA 2003 (see
EIM13500onwards).
A deduction that is due is not limited to expenses actually paid
by the deceased. The personal representatives can have a deduction
for an expense that the deceased was due to pay but that the
representatives actually settle.
As regards:
- the time limit for assessing personal
representatives, see
EIM42400
- the treatment of earnings received up to
the date of death, see
EIM42410.
