Who is responsible for paying income tax owed by a deceased person under section 74 of the Taxes Management Act 1970?

Under section 74, when a person liable to income tax dies, their executor or administrator — known as personal representatives — becomes responsible for paying the outstanding tax. The liability transfers to them in their representative capacity, ensuring HMRC can still collect tax owed despite the taxpayer's death.

Can a personal representative recover income tax payments made on behalf of a deceased person?

Yes. Section 74 entitles the executor or administrator to reimburse themselves by deducting tax payments from the deceased person's estate assets and effects. This means the tax burden is ultimately borne by the estate rather than by the personal representative personally, protecting them from financial loss.

What happens if a personal representative neglects or refuses to pay the deceased's income tax?

If the executor or administrator neglects or refuses to pay the outstanding income tax, HMRC can take enforcement action against them in exactly the same manner as it would against any other tax defaulter. This provides a clear collection mechanism for tax owed by the deceased after their death.

How does section 74 work in practice when settling a deceased person's tax affairs?

In practice, the executor identifies the deceased's outstanding income tax liability, pays the amount owed to HMRC, and then deducts that sum from the estate before distributing remaining assets to beneficiaries. For example, an executor settling a £12,000 liability would recover that amount from the estate funds.

Taxes Management Act 1970 section 74

Personal representatives

Section 74 deals with the responsibility of executors and administrators to pay any income tax owed by a deceased person, and the consequences if they fail to do so.

When a person liable to income tax dies, their executor or administrator becomes responsible for paying the outstanding tax.
The executor or administrator may recover any tax payments they make from the deceased person's assets and effects.
If the executor or administrator neglects or refuses to pay the tax due, they can be pursued in the same way as any other tax defaulter.
The liability transfers to the personal representative in their capacity as such, ensuring HMRC can still collect tax owed despite the taxpayer's death.

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