Deceased Tax Return Ireland: Final Return and Refunds

In the estates we coordinate, a Revenue refund is one of the assets most easily overlooked in a small estate. The house, the bank accounts, and the credit union balance all get counted. The few hundred or few thousand euro sitting with Revenue does not, because nobody thinks to look. It is there because a full year’s tax credits were set against ten months’ income. This guide, part of our wider overview of dealing with assets after death in Ireland, sets out how to find it and claim it.

Handling Revenue is also one of the clearest points of personal exposure for an executor or administrator. Distribute without settling the deceased’s tax and you may end up paying it. Fail to claim a refund the estate was owed and you may end up making that good too. Our guide to executor duties in Ireland covers the wider role; this one covers the Revenue part of it.

Telling Revenue about the death

Revenue asks you, or a solicitor acting for you, to inform your loved one’s Revenue office as soon as possible. You can do this by telephone, in writing, or through MyEnquiries. The details Revenue asks for at this point are simply the date of death together with your own name and address.

Revenue may already know. A system interface from the General Register Office, which sits under the Department of Social Protection, has automatically updated dates of death on Revenue records since 2017. Separately, an employer or pension provider who stops paying someone must notify Revenue within 30 days of that cessation, and can do so through the payroll submission.

The documents Revenue lists for a personal representative are a copy of the will if there is one, the Grant of Probate or the Letters of Administration, and the Statement of Affairs (Probate) Form SA.2. The grant is the court’s permission to deal with the estate — a Grant of Probate where there is a will, Letters of Administration where there is not. The Form SA.2 is the online statement of the estate’s assets and debts that replaced the paper Inland Revenue Affidavit. You will not have all of these at the point of first notification, and Revenue does not ask you to wait until you do.

The final income tax return: Form 11 or Form 12

The return that closes off your loved one’s personal tax affairs covers the period from 1 January of the year of death to the date of death itself. It is not a full-year return. Which form it is depends on how they were taxed in life, not on the size of the estate or on whether a grant is needed.

A person whose main source of income was a PAYE employment or a pension files a Form 12. A “chargeable person” for self-assessment files a Form 11. Someone with a PAYE income becomes a chargeable person where their net assessable non-PAYE income reaches €5,000, or where their total gross non-PAYE income reaches €30,000.

A Form 11 for a deceased person can still be filed on ROS, but only after the tax year has ended. Returns become available for completion at that point. So where a death happens partway through a year, the final Form 11 cannot be filed until the following January — worth factoring into when you expect to reach the clearance step.

From the 2021 Form 11 onwards, entering a date of death makes the personal representative’s name and address a mandatory field — so have your own details to hand before you start, not just your loved one’s.

Where your loved one was married or in a civil partnership and the couple were jointly assessed, the position shifts. The assessable spouse is the one in whose name the couple’s joint tax was handled. If the survivor was the assessable spouse, they keep the married person or civil partner tax credit and rate band for the year. They then account for their late spouse’s income from 1 January to the date of death on their own return.

Why a refund arises — and who it belongs to

A refund arises most often for a simple arithmetical reason. In the year of death, the normal tax credits for the whole of that year apply, but income was only earned for part of it. Tax was deducted week by week on the assumption of a full year’s earnings, so more was paid than was ultimately due.

Where your loved one was a PAYE employee, Revenue states that a refund may be due, that the employer notifies Revenue when the final payment is made, and that any refund due becomes part of the estate. The employer’s notification is what puts the cessation on Revenue’s record — it does not, by itself, get the money to you.

Because the refund is an estate asset, it is not yours to keep and not the surviving spouse’s to keep either, unless the will or the intestacy rules say so. It goes into the estate account, appears in the estate accounts you prepare, and is distributed with everything else.

Reliefs you can still claim after the death

Health expenses are easy to overlook after a death, and the amounts can be substantial. Section 469 of the Taxes Consolidation Act 1997 allows amounts paid out of a deceased person’s estate for health expenses to be set against that person’s own tax liability. Payments made by the executor after the death are treated as if your loved one had paid them immediately before dying.

The rate matters. Most health expenses are relieved at the standard rate of 20%. Qualifying nursing home expenditure is given as a deduction from total income instead, so it is relieved at the marginal rate — the highest rate of tax your loved one paid, up to 40%. Relief for nursing home costs is only allowed where the home provides access to 24-hour nursing care on site.

The Fair Deal nursing home loan is a specific and valuable case. Where the deferred contribution is repaid out of the estate after the death, Revenue treats it as having been paid by the deceased immediately before they died, and it can be claimed as a health expense at the marginal rate. We cover the repayment mechanics in our guide to the nursing home loan repayment after death.

Do you need a grant before Revenue will deal with you?

This is the question personal representatives of small estates ask most, and Revenue’s published guidance does not answer it with a single clean rule. What follows is what the guidance does say, and where it stops short — because guessing here is how executors end up waiting for a grant they may never have needed.

Notification plainly does not require a grant. Revenue asks only for the date of death and your name and address, by phone, in writing, or through MyEnquiries. Nothing in that instruction is conditional on a Grant of Probate or Letters of Administration having issued.

Clearance is more nuanced. Revenue’s clearance manual says that where a grant is required or intended, the application to the Probate Office should be made before clearance is sought. It also states expressly that a clearance request can be submitted before probate is granted. And it deals directly with estates that need no grant at all — small estates, or assets that passed automatically to a joint owner by survivorship.

In those no-grant cases the representative confirms that no grant is required and gives the basis for that position, then supplies a Schedule of Assets in place of the Form SA.2. So Revenue’s own process assumes some estates will be cleared without any grant ever issuing. Whether a grant is needed at all is a separate question worth settling early.

Tax during the administration period

Income and gains arising between the date of death and distribution belong to the estate rather than to your loved one. Revenue requires you to register the estate for Income Tax and to file a return for each year until you distribute the assets. Income Tax is charged at the standard rate during the administration period, and no personal tax credits or reliefs apply.

A personal representative registers the estate by completing a Form TR1, Revenue’s tax registration form. The online route through Revenue’s eRegistration system is built for agents. A solicitor or tax agent registers under the trust options using their TAIN — the agent identifier — with the trust type “Estate”, and the appointee recorded as executor or personal representative. Revenue notes that all estates are mandatory eFilers, so returns go in electronically.

Capital Gains Tax follows a different rule. There is no CGT on the death itself, and none on assets you transfer to a beneficiary in your capacity as personal representative. CGT can arise where you sell an asset during the administration, calculated on the gain between the date of death and the date of sale.

One point catches people out on that sale. Revenue states that the €1,270 annual personal exemption is restricted to individuals, and that a personal representative cannot claim it. So the whole gain is chargeable. There is no small-gain allowance to fall back on when you set money aside for the tax out of the sale proceeds.

Estate tax clearance: the death case clearance request

Clearance is the final Revenue step before you pay the beneficiaries. The request goes through MyEnquiries. In ROS you choose a category of PAYE, Income Tax, or Capital Gains Tax, and the sub-category “Death case – clearance request”. In myAccount, where no drop-down appears, you type that phrase plus the relevant tax head into the free-text box.

Those three categories are the tax heads this process covers: the deceased’s income tax and capital gains tax, and the estate’s own. It is not a CAT clearance. Each beneficiary’s inheritance tax is normally their own affair, returned on their own Form IT38.

Timing matters. Revenue expects the request only after you have carried out due diligence on the estate, and only once its value has been settled. In practice that means when administration is complete and the assets are ready to go out. Sending it early does not start the clock any sooner in a useful way.

Two mechanics are worth knowing. Submitting the request generates an automatic acknowledgement recording the date Revenue received it — keep it, because it is what dates the 35 days. And if an amended Form SA.2 is delivered afterwards, you must tell Revenue, and the 35 working days start again from scratch.

Do not wait for a letter saying you are cleared. Revenue caseworkers do not issue a reply where no further review is planned. A compliant submission has “deemed clearance” once the 35 working days have elapsed, and silence is the answer. A reply refusing clearance, if one is coming, must be sent inside that same period.

What you are personally exposed to

Revenue states the exposure in two sentences, and they run in opposite directions. If you distribute the estate without paying outstanding tax, you may have to pay that tax yourself. If you do not claim a tax refund that is due to the estate, you may have to repay the estate yourself.

The second is the one people miss. Under-claiming is treated as a failure of the role, not as a harmless omission. The beneficiaries were entitled to that money, and finding it is part of the job. A refund nobody looked for is a shortfall in the estate, and it is the personal representative who has to make it good.

The statutory basis is section 1047 of the Taxes Consolidation Act 1997. Where a person chargeable to income tax dies, the executor or administrator is liable for the tax charged on them, for interest on late payment, and for penalties. Those sums are a debt on the estate, and the executor may deduct them out of the assets.

There is a limit on how long this stays open. Revenue’s guidance states that liability in death cases must generally be finalised within three years after the end of the year of assessment in which the death occurred. Section 1048 of the same Act sets the matching assessment deadlines, with a two-year limit running from the year the grant was made in other cases.

For estates that are more complicated than they first looked — outstanding returns, disputed valuations, debts that may exceed assets — the Revenue position is rarely the only issue. Our guide to insolvent estates in Ireland covers the order in which debts, including tax, must be paid when there is not enough to go round.