Legal personal representatives (LPRs) are individuals appointed to manage and administer the estate (assets, liabilities, and property) of a deceased person. They are either executors named in a will or administrators appointed if no will exists. LPRs handle tax, debts, and distribute assets, bearing a legal fiduciary duty to act in the best interests of beneficiaries Revenue.

The taxation issues that arise are:

• Requirement for executors/administrators to obtain a Revenue Letter of Clearance
  • Before distribution of a deceased persons estate to the legally entitled beneficiaries, and in order to avoid personal liability, Legal Personal Representatives (LPR) such as executors and administrators must obtain a letter of clearance from Revenue.
• Comply with requirements for LPRs as outlined in Revenue Tax & Duty Manual on Requests for Clearance in Death Cases
  • Revenue Tax and Duty Manual Part 46-01-02 entitled Request For Clearance In Death Cases outlines in detail what is required by Revenue in relation to tax registrations, tax returns, due diligence and clearance requests.
• Complete relevant revenue registrations for deceased taxpayer and separate registration for the Estate
  • Tax registrations with Revenue for the deceased taxpayer are required to facilitate filing of tax returns to date of death. It may be necessary to register the Estate Under Administration as a new Revenue customer and obtain a new tax reference number to file returns of income and gains for the estate during the administration period.
• File tax returns to include income & gains for year of death and previous 4 years
  • As part of the due diligence process, tax returns for the year of death and for the previous 4 years are required for the deceased taxpayer
• Complete due diligence and necessary enquiries on behalf of the legal personal representative
  • Due diligence required as part of the Revenue clearance process and is generally completed when the solicitor has obtained the Grant of Probate or Grant of Administration. It is necessary to make appropriate enquiries into the deceased taxpayers affairs and regularise matters as the need arises.
• Tax implications of non-resident LPRs and/or beneficiaries
  • An Irish resident personal representative of a deceased person is assessable and chargeable for the tax payable by a non-resident beneficiary where that non-resident beneficiary does not deliver a CAT return and make a payment of the tax in accordance with the applicable pay and file requirements in section 46 CATCA 2003 (section 45AA(1)). Additionally, where there is no Irish resident personal representative, section 48(10) CATCA 2003 provides that prior to seeking a Grant of Probate or Letters of Administration the personal representative must appoint a solicitor holding a practicing certificate in the State to act in connection with the administration
• Liaise with solicitor for the estate to discharge tax liabilities
  • Solicitors are the lynchpin for all estate matters and liaising with the solicitors for the estate is a key part of the tax advisor’s role. We make contact with the solicitors in early course to ensure that pre-death tax issues of the deceased and post-death tax issues of the estate while under administration are dealt with in a timely manner without delay. Liaising with the solicitors at an early stage in the administration process if essential if post death variations such as disclaimers or deeds of family arrangement are being considered.
• Liaise with solicitor for the estate to facilitate distribution
  • We progress all necessary tax registrations, filing of returns, arranging payments to Revenue, due diligence and all other tax requirements in a timely manner and in conjunction with the solicitors for the estate. This facilitates early and efficient applications to Revenue for letters of clearance which is key to distribution to the beneficiaries.

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