Annex 1: Minor changes in the law made by the Act: Change 104: Death of a seller of patent rights: time for serving notice: sections 593 and 862
This change relates to the correction of an omission to revise, in connection with the Self Assessment reforms, the time limit for serving a notice under section 525(2) of ICTA.
Section 525(2) of ICTA sets a period within which the personal representatives of a seller of patent rights who has died may claim a reduction in the tax payable out of the estate. The claim must be made “not later than 30 days after notice has been served on them” of the charge falling to be made under section 525(1) of ICTA.
The system of Self Assessment for personal tax applied from the tax year 1996-97 onwards. Schedule 21 to FA 1996 contained amendments of provisions setting time limits for claims, elections etc to align them with the time limits for certain actions under the Self Assessment system, such as the filing of tax returns. The normal time limit for filing a personal return containing a self-assessment is 31 January following the tax year to which the return relates.
When a person dies, his personal representatives are responsible for making any Self Assessment return for the year of death and agreeing and settling all tax liabilities up to and including the year of death. It therefore makes sense to align the time limit in section 525(2) of ICTA with the normal Self Assessment time limit.
Schedule 21 to FA 1996 did not amend the time limit in section 525(2) of ICTA. This omission has been corrected by revising the time limit in the rewritten legislation.
This change has no implications for the amount of tax due, who pays it or when. It affects (in principle and in practice) only administrative matters.