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HC 7: Trustee income
or “Income earned by a trust that isn't given to beneficiaries”
You could also call this:

“How to handle money received after someone dies”

If you are taking care of someone’s money and property after they have died, you might receive money that the person would have gotten if they were still alive. This law tells you what to do with that money.

If you get any money within 28 days after the person died, you can treat it as if the person got it before they died. This is called ‘reportable income’.

For any other money you receive later, you need to follow a different rule. You should look at [section CV 12] to understand how to deal with this money. It says that you, as the person looking after the estate, will need to count this money as your own income for that year.

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Next up: HC 8B: Trustee income in income year of person’s death and following 3 income years

or “Tax on trust money for four years after someone dies”
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Part H Taxation of certain entities
Trusts

HC 8Amounts received after person’s death

  1. This section applies when a trustee of an estate of a deceased person receives an amount in an income year that is not income that the person derived during their lifetime, but would have been included in the person’s income had they been alive when it was received.

  2. The trustee may treat an amount of reportable income received by the trustee within the period of 28 days starting with the date of the person’s death as if it were income that was derived by the person before being received by the trustee.

  3. An amount not treated as being derived by the person under subsection (1B) is treated under section CV 12 (Trustees: amounts received after person’s death) as income derived by the trustee in the income year.

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Notes
  • Section HC 8(1B) heading: inserted (with effect on 1 April 2022), on , by section 77(1) (and see section 77(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
  • Section HC 8(1B): inserted (with effect on 1 April 2022), on , by section 77(1) (and see section 77(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
  • Section HC 8(2): amended (with effect on 1 April 2022), on , by section 77(2) (and see section 77(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
  • Section HC 8 list of defined terms reportable income: inserted (with effect on 1 April 2022), on , by section 77(3) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).