TSEM7912 - Deceased persons: Personal representatives' expenses: What expenses are allowable?

Personal representatives’ expenses are described as allowable if they are to be taken into account for income tax purposes, that is, they can be deducted from the aggregate income of the estate when the personal representatives are calculating the amount of income chargeable on the beneficiary. Expenses are only one element of the allowable estate deductions (TSEM7678).

A payment must be an expense to qualify. A payment to a beneficiary is a distribution from the estate. This includes provision of a benefit in kind and meeting a debt of the beneficiary.

The following items are examples of the type of expenses that are allowable:

• Professional fees of, for example accountants and solicitors, relating to the preparation and submission of estate income tax returns. Returns for capital gains tax purposes are capital expenses but where a return includes both income and capital gains, a reasonable apportionment may be made.
• Professional fees or other expenses relating to the preparation and submission of estate accounts to the extent that they relate to income.
• Testamentary and administration expenses if these are concerned with generating income.

The deduction for allowable expenses is given against aggregate income and not against any specific income source.