HMRC Scheme Enquiries on Deceased Contractor

[Roger104]

A good friend of mine worked as an IT contractor for many years.

He utilised an offshore company (Isle of Man) in his last role and got paid a minimum salary plus loans and high expense claims, etc.

He died earlier this year.

Apart from a relatively small amount yet to be paid against his final return, he was up-to-date in payments against his tax returns.

HMRC are now writing to his widow (letters are still addressed to him!) asking MANY questions about his working/payment arrangements. She has found some of the details by looking at the data on his laptop but generally has no idea.

My questions are: a) Can HMRC investigate deceased taxpayers b) Should she provide the details to them c) should she just say "Don't know, why don't you ask him".

This is causing his family great stress so I would be grateful for any advice.

[jbryce]

A good friend of mine worked as an IT contractor for many years.

He utilised an offshore company (Isle of Man) in his last role and got paid a minimum salary plus loans and high expense claims, etc.

He died earlier this year.

Apart from a relatively small amount yet to be paid against his final return, he was up-to-date in payments against his tax returns.

HMRC are now writing to his widow (letters are still addressed to him!) asking MANY questions about his working/payment arrangements. She has found some of the details by looking at the data on his laptop but generally has no idea.

My questions are: a) Can HMRC investigate deceased taxpayers b) Should she provide the details to them c) should she just say "Don't know, why don't you ask him".

This is causing his family great stress so I would be grateful for any advice.

Debts to HMRC are managed out of the deceased's estate, before other provisions in the will are made. If he is subject to an inquiry, which could drag on for years, then is it possible the estate cannot be effectively wound up?
Speak to the solicitor handling the estate, he should be able to advise, and she does need advice here. I'd be interested to know what the solicitor says.

[handyandy]

Sorry to hear your friend passed on.

There are several ways to play this depending on how helpful you want to be to HMRC.

Assuming the wife had no legal relationship to the offshore company/vehicle then very simply she should not try and answer any HMRC queries and simply forward them a certified copy of the death certificate.

If HMRC decide to open an inquiry then it is up to the executor/administrator of the estate to deal with that (it could delay winding up the estate). If they do and if the family are using a solicitor as executor try and find one who has experience of dealing with HMRC inquiries. However, HMRC may well decide not to try and pursue this in the circumstances as it is very unlikely that the taxpayers representative will be able to answer the questions and it will be much harder for them to establish a debt exists.

If you wanted to play HMRC at their own game then don't even send the death certificate or inform them of the death - ignore their letters unless it is a bill/statement of account. Try to wind up the estate quickly and publish the relevant gazette notices as to when the estate will be wound up - if HMRC do not act before then with a statement of taxed owed then they will find it very hard to reopen the estate.


HMRC will still expect any outstanding debts (based on submitted returns) to be settled from the estate.