Does the estate get a personal allowance?

No. Personal representatives pay tax on estate income from the first pound, which is why closing accounts promptly reduces the admin.

Tax · 5 min read

Income tax during the administration period

Inheritance Tax is not the only tax an executor deals with. There are two separate income tax exercises, and the second one is the one people forget.

Written and reviewed by Ramani Gill, Founder & CEO — Solicitor, TEP, BA, LLM. Last reviewed 2026-08-19.

Job one: to the date of death

A final return may be needed for the tax year up to the date of death
Personal allowances apply for the full tax year, so a refund is common
HMRC often issues a simple calculation rather than requiring a return
A refund is an estate asset; an underpayment is an estate debt

Job two: the administration period

Income the estate receives after death — bank interest, dividends, rent — is taxable on the personal representatives. There is no personal allowance, and it is taxed at the basic rate for most income types.

Income	Rate on the estate
Interest and rental income	Basic rate
Dividends	Dividend ordinary rate
Personal allowance	None

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Reporting and R185

Keep a simple record of estate income and expenses from the date of death
Use HMRC's informal procedures where the estate's income and gains are small
Register the estate for tax where the amounts are larger or the administration runs long
Give each residuary beneficiary a form R185 (Estate Income) showing income paid to them and the tax already suffered

R185 matters to the beneficiaries

Beneficiaries need the R185 to complete their own returns, and a non-taxpayer may reclaim the tax the estate has paid on their share.

GOV.UK — Tax on the estate

Common questions

Does the estate get a personal allowance?: No. Personal representatives pay tax on estate income from the first pound, which is why closing accounts promptly reduces the admin.

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