Trust and Estate Tax Return UK 2026: SA900 Guide for Executors and Trustees
Updated 15 May 2026 · 9 min read · England & Wales
When someone dies, their estate often continues to receive income — bank interest, dividends, rental payments — during the period between death and final distribution. Trusts created during life or in a will also generate income and gains. HMRC taxes both through the SA900 Trust and Estate Tax Return. Understanding when to file, what to report, and how the tax is calculated is a core duty for executors and trustees.
The SA900: What It Is
The SA900 is HMRC's self-assessment return for trusts and estates of deceased persons. It covers income tax and capital gains tax (not IHT — that is reported on IHT400/IHT205 separately). The SA900 must be filed for each tax year (6 April to 5 April) in which the trust or estate has:
- Taxable income above the applicable threshold
- Capital gains from the sale of estate or trust assets
- Income from property, investments, business interests, or other sources
- Distributed income that beneficiaries need to include in their own returns
Does the Estate Need to File an SA900?
Many simple estates can be dealt with under HMRC's informal procedure without filing an SA900. The informal route applies where:
- The administration period is short (under 2 years as a rule of thumb)
- Total estate income in any tax year is below £500
- There are no chargeable gains on estate assets
- The estate is straightforward with no complex assets
Where the informal procedure applies, the executor reports income to HMRC on form R27 and HMRC issues a tax calculation. No SA900 is required.
An SA900 is required where:
- The administration period extends beyond two tax years
- Income in any tax year exceeds £500
- The executor sells estate assets at a gain above probate value
- There is property income from a rental property in the estate
- Beneficiaries need an R185 (Estate Income) certificate to report their share
- HMRC issues a notice to file
Registering the Estate with HMRC
To file an SA900, the estate must first be registered:
- Register the estate with HMRC — use the online “Register an estate” service on gov.uk. You will need the deceased's UTR (if they had one) and the executor's details. HMRC issues a new UTR for the estate within about 4 weeks.
- Set up an HMRC online account — the executor creates a Government Gateway account and adds the estate UTR to their account.
- File the SA900 online — using HMRC's online service or HMRC-approved software (many solicitors and accountants use commercial software). Paper filing is also possible.
Trusts that already have a UTR can proceed directly to filing. New trusts must register on the Trust Registration Service (TRS) before filing an SA900.
Deadlines and Penalties
| Filing method | Deadline (for 2025/26 return) |
|---|---|
| Paper SA900 | 31 October 2026 |
| Online SA900 | 31 January 2027 |
| Tax payment due | 31 January 2027 |
Penalties for late filing: automatic £100 on day 1; £10 per day after 3 months; £300 (or 5% of tax due if higher) after 6 months; the same again after 12 months. Interest accrues on unpaid tax from the due date. An executor who is late filing without reasonable excuse is personally liable for the penalties.
Income Tax During Estate Administration
During the administration period, income arising on estate assets is taxed on the personal representatives as a collective entity (ITA 2007 s.656). Key rules:
- Savings income (bank interest): 20% basic rate. No starting-rate band, no personal savings allowance.
- Dividends: 8.75% (dividend ordinary rate for 2026/27). The higher rates (33.75%, 39.35%) do not apply to estates.
- Property income: 20% basic rate. Allowable deductions follow the normal rental income rules (mortgage interest at basic rate, repairs, agent fees).
- No personal allowance: estates do not receive the £12,570 personal allowance — all income is taxable from the first pound.
When the residue is distributed to beneficiaries, they receive an R185 (Estate Income) certificate showing the income and the tax deducted. Beneficiaries declare this on their own self-assessment return and pay any higher-rate tax due.
Capital Gains Tax During Administration
Assets receive a free CGT uplift at death — the base cost resets to probate value, eliminating all gains accrued during the deceased's lifetime. However, CGT arises if assets are sold during administration for more than the probate value:
- Annual exempt amount: £1,500 for estates (2026/27) — the same as for trusts, not the £3,000 individual amount
- Residential property: 24% (higher rate), 18% (basic rate)
- Other assets: 24% and 18% respectively
- 60-day reporting: UK residential property disposals must be reported to HMRC within 60 days of completion, even where the gain is within the annual exempt amount
Income Tax Rules for Trusts
The tax rates applicable to a trust depend on its type:
| Trust type | Income tax rate | Dividend rate |
|---|---|---|
| Discretionary trust | 45% (trust rate) | 39.35% |
| Interest in possession trust | 20% (basic rate) | 8.75% |
| Bare trust | Beneficiary's rates (not the trust's) | — |
| Disabled persons trust | Beneficiary's rates | — |
Discretionary trusts accumulate a tax pool of 45% tax credits. When income is distributed to beneficiaries, they receive an R185 (Trust Income) and can reclaim the difference between 45% and their actual marginal rate. A basic-rate taxpayer can reclaim 25% of the gross distribution; a non-taxpayer can reclaim 45%.
The first £1,000 of trust income is taxed at the basic rate (not the trust rate), but only one £1,000 band is shared between all trusts created by the same settlor.
The Trust Registration Service (TRS)
Most trusts (including non-taxable trusts) must register on HMRC's Trust Registration Service. Registration is required:
- Within 90 days of creation for new express trusts
- By 1 September in the year following the year the trust becomes taxable
- Non-taxable trusts must also register if they have UK assets or UK-resident trustees
Estates are only required to register on TRS if they have a liability to pay UK taxes during administration. Excepted estates (dealt with informally) generally do not need to register.
Failure to register can result in penalties of £100 per offence (rising to £5,000 for serious failures), in addition to any underlying tax penalty.
Who Is Responsible: Executors and Trustees
Executors (personal representatives) are jointly and severally liable for the estate's tax obligations during administration. If one executor files late, all can face penalties. After the estate is distributed, executors are discharged — but HMRC can still pursue them personally if tax was not correctly dealt with.
Trustees are liable as a body for the trust's tax. Retiring trustees should ensure their liability is settled before retirement. New trustees inherit the tax obligations of their predecessors.
When to Get Professional Help
File the SA900 yourself only for the simplest cases. Use a professional (accountant or solicitor with probate/trust experience) where:
- The estate has property income or capital gains during administration
- The estate extends over more than one tax year
- The trust is a discretionary trust with a tax pool
- There are foreign assets or non-UK domicile complications
- HMRC has opened a compliance check
- The tax position is uncertain
Frequently Asked Questions
Does every estate need to file an SA900 tax return?
No. Many straightforward estates do not need an SA900. HMRC's 'informal procedure' allows executors to settle estate income tax without filing a return where: the administration period is less than 2 years; the only income is interest, dividends, or property income below £500 in any tax year; there are no chargeable gains on estate assets; and the income can be reported informally to HMRC on form R27. If the estate does not qualify for the informal procedure — because the administration is lengthy, income is substantial, there are chargeable gains, or the estate is complex — an SA900 must be filed. When in doubt, register with HMRC and file — it is far better than receiving a surprise compliance check years later.
What is the deadline for filing an SA900 trust and estate tax return?
The SA900 filing deadlines mirror self-assessment: 31 January following the end of the tax year for online filing; 31 October following the end of the tax year for paper filing. For example, an SA900 for the 2025/26 tax year (ending 5 April 2026) must be filed online by 31 January 2027 or on paper by 31 October 2026. The same deadlines apply to trusts and estates alike. Late filing attracts an automatic £100 penalty, rising to £10 per day after 3 months, and a further penalty of £300 (or 5% of tax due if higher) after 6 months, and again after 12 months.
How does income tax work during estate administration?
During administration, income arising on estate assets (bank interest, dividends, rental income) is taxable on the estate — not directly on the beneficiaries. The personal representatives (executors or administrators) are treated as a single person for income tax purposes (ITA 2007 s.656). The estate pays income tax at the basic rate (20%) on savings and rental income and at the dividend ordinary rate (8.75% in 2026/27) on dividends — not at higher or additional rates, regardless of the beneficiaries' tax positions. However, when residuary beneficiaries receive their share of the residue, HMRC treats a proportion of the income as having been received by them at basic rate, and they must account for any higher-rate tax due on their own self-assessment returns. There is no personal allowance for estates.
Are there capital gains in a deceased person's estate and how are they taxed?
Assets in a deceased person's estate receive a free CGT uplift at death — the base cost resets to the probate value for whoever receives the asset, wiping out all gains accrued during the deceased's lifetime. However, if the executor then sells assets during the administration period for more than the probate value, a chargeable gain arises. CGT in the administration period is charged at the residential property rate (24% for higher rate, 18% for basic) for residential property and at the main CGT rates (18%/24%) for other assets. The estate has an annual exempt amount of £1,500 (2026/27) — the same as for trustees. Gains must be reported on the SA900 or (for residential property disposals) on the CGT 60-day online report.
How do trusts file their tax returns and what rates apply?
Trusts that are not bare trusts must file an SA900 for each tax year in which they have income or gains. Discretionary trusts pay income tax at 45% on most income (39.35% on dividends) — the trust rate. The first £1,000 of trust income is taxed at the basic rate. Trustees get a tax pool credit of 45% that beneficiaries can reclaim when income is distributed; basic-rate taxpayers reclaim the difference between 45% and their marginal rate. Bare trusts (where beneficiaries are absolutely entitled) are transparent: the beneficiary, not the trustees, is taxed on income and gains as they arise and the SA900 is generally not required (income goes on the beneficiary's personal return). Interest in possession trusts pay tax at the basic rate on income (the life tenant is then taxed at their own marginal rate on what they receive). CGT for trusts is charged at trust rates (24%/18%) with a £1,500 annual exempt amount.
Do non-UK domiciled estates need to file an SA900?
A deceased person's domicile at death determines which jurisdiction taxes their worldwide estate for IHT purposes. For income tax during administration, the relevant test is the residency and source of income: UK-source income (UK bank interest, UK property income, UK dividends) arising during administration is always subject to UK income tax, regardless of domicile. Non-UK source income is only subject to UK tax if the estate is UK-resident (which it generally is if the personal representatives are UK-resident). Estates with foreign assets or non-UK domiciled deceased persons require specialist tax advice — the interaction of IHT, income tax, and foreign tax regimes is complex.
Planning Ahead Simplifies Estate Administration
Estates that are well-organised — with a clear will, up-to-date beneficiary nominations on pensions, and assets in trust where appropriate — are typically administered faster and with lower tax complexity. Our DIY will kit helps you set up the right structure from the start.
Get the WillSafe Kit →Related Articles
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- Executor personal liability — what you are responsible for
- How to value an estate for probate
- Disabled person's trust — tax advantages explained
This article is for general information only and does not constitute tax or legal advice. Tax rules change regularly and individual circumstances vary. Always consult a qualified accountant or tax adviser for trust and estate tax matters.