Readers’ forum: Passing gesture

A client who worked for a hotel chain died recently. He was neither a director nor a shareholder. The hotel would like to pay a year’s salary of more than £100 000 to his estate or his widow. One complication is that probate is not needed but if the widow opens an estate bank account she cannot access the money without obtaining probate.

Can Taxation readers assist with the tax implications and advise on whether the payment should be made to the estate or the widow?

Query 19 475 – Hotelier.

Reply by ANA

Could this be from an employer-financed retirement benefits scheme?

Hotelier will need to consider whether the payment is taxable as employment income of his deceased client. Whether the payment is made to the estate or widow is irrelevant in this regard.

First he must decide whether the...