SE42390 - Emoluments from offices and employments: basis of assessment - emoluments received after the death of an employee or office holder - the charge on personal representatives

Section 202A(3) ICTA 1988 and Section 37(3) FA 1989

If an employee or office holder dies and emoluments are received after the date of death, the personal representatives are charged to tax on them (see SE42380). They are charged

• at the basic rate only
• in the year the emoluments are received (or, for Case III, received in the United Kingdom)
• without any allowances, deductions or reliefs except for the Schedule E deductions, reliefs and exemptions which would have been due to the employee had they lived.

The personal representatives cannot claim deductions for expenses which they incur separately themselves. The main deductions due are therefore

• expenses within Section 198 ICTA 1988 incurred by the employee or office holder (see SE31620 onwards)
• balancing allowances due to the employee or office holder; balancing charges will also fall on the personal representatives (see SE36500 onwards)
• the 100 per cent deduction due under Section 193 ICTA 1988 to an employee or office holder within Case I of Schedule E who spent more than 365 qualifying days abroad (see SE33000 onwards)
• foreign travel and accommodation expenses within Sections 193 to 195 ICTA 1988 incurred by the employee or office holder (see SE34000 onwards)
• professional fees and subscriptions within Section 201 ICTA 1988 (see SE32880 onwards)
• where a lump sum is assessable under the “golden handshake” provisions the various exemptions which are available under Section 148 and Schedule 11 ICTA 1988 (see SE13500 onwards).

A deduction which is due is not limited to expenses actually paid by the deceased. The personal representatives can have a deduction for an expense which the deceased was due to pay but which the representatives actually settle.

As regards

• the time limit for assessing personal representatives, see SE42400
• the treatment of emoluments received up to the date of death, see SE42410.