TSEM7908 - Deceased persons: Personal representatives' expenses: What are personal representatives' expenses?

Personal representatives’ expenses are expenses incurred by the personal representatives in administering the estate of a deceased person. They are distinguished from payments made to beneficiaries which are distributions from the estate. They are expenses incurred only in the capacity of personal representatives and not in any other capacity, for example as professional legal advisers or as trustees.

Personal representatives’ expenses do not affect the tax position of the personal representatives themselves. Personal representatives take the expenses into account in calculating the amount of income chargeable on the beneficiary of an estate who has an interest in residue. They do this by deducting the income expenses from the aggregate income of the estate (TSEM7608, TSEM7678).

A will may state that expenses normally attributable to capital may be paid out of income or may simply authorise payment of expenses from income but this does not determine the treatment for tax purposes. If the expense is not attributable to income under general law, then it is not an allowable expense for income tax purposes (TSEM7910)

Relatively few categories of expense will qualify as allowable simply because the exercise of administration is concerned with collecting in and distributing the assets of the estate.