New Revenue Clearance Procedures
02 March 2022
A significant development with respect to the streamlining of probate administration has recently occurred with the launch by Revenue of a new clearance system for estates.
Revenue has published “Requests for clearance in death cases” which was created in February 2022 (yes the link is below!).
Essentially Revenue have put in place a more formal procedure to replace the old letter of clearance system.
Just to take a step back. We all know that when a person dies, the beneficiaries may have to pay inheritance tax. However, it is also a duty of the personal representative (and us as advisors) to ensure that the income tax and CGT affairs of a deceased person are in order. All outstanding income tax of a deceased person must be established and paid. Until this step is taken a personal representative should not distribute funds in an estate. This is known as Revenue clearance.
Up to now, the normal procedure for seeking Revenue clearance was to send a copy of the Statement of Affairs /CA24 to Revenue by letter or through My enquiries and look for clearance. Normally Revenue would write back with a set of queries and once these were answered the letter of clearance issued. This was a cumbersome procedure and could take months to complete.
Under the new procedure, Revenue have laid out the specific categories of information that must be provided to them (they are quite extensive). Once they receive all the relevant information fully and truthfully completed, Revenue must issue their queries within 35 working days. If the queries are not issued within that time period a personal representative is free to distribute.
This is an important and welcome development and brings a degree of certainty to what was a haphazard system. There is significant additional work for solicitors in the collating of information required for the clearance submission and solicitors should factor that in when assessing the overall workload of a probate case.
Here is the link to the new guidance
Hope this helps and if you have any queries on probate, tax, capacity or will drafting issues please contact me at firstname.lastname@example.org