Tax refunds

Every year the Insolvency & Trustee Service receives a number of enquiries from bankrupts asking about their tax refunds.

Filing tax returns remains the responsibility of bankrupts, however any tax refunds that result from periods in which a taxpayer is still bankrupt, become the property of the Official Assignee and will be paid directly to the Official Assignee.

In the final year of bankruptcy, Inland Revenue will apportion any tax refunds around the date of discharge. Refunds due up to the date of discharge come to the Official Assignee, and refunds due after discharge go directly to the taxpayer.

Bankrupts who are experiencing financial hardship are able to contact the Official Assignee to make a case for some or all of the tax refund money held to be paid to them as an allowance. Note however that this can only happen while the taxpayer is bankrupt and not once they have been discharged.