TSEM7902 - Deceased persons: Personal representatives' expenses: Introduction

Personal representatives’ expenses are one element of the deductions taken into account in the calculation of the residuary income of an estate (TSEM7678). They are expenses that are incurred in managing the estate of a deceased person. Allowable expenses are taken into account for tax purposes so that the personal representative can calculate the amount of income that a beneficiary of an estate, who has an interest in residue, is entitled to receive (ITTOIA 2005/s666 for non-corporate beneficiaries and CTA 2009/s949 for corporate beneficiaries). The beneficiary’s tax liability is then determined from this entitlement (TSEM7450 onwards).  Personal representatives’ expenses are relevant only where a residuary beneficiary has an absolute interest in residue (TSEM7678).

Expenses can be taken into account only if they are income in nature (ITTOIA 2005/s666(5) and CTA 2009/s949(5)). Expenses that are concerned with identifying, collecting in, realising or preserving assets of the estate and with ascertaining and distributing the capital are properly chargeable to capital. As the main responsibility of the personal representatives is to undertake these activities, relatively few items of expenditure are allowable for tax purposes.

The following guidance at TSEM7904 onwards provides further detail.