Who gets interest and dividends paid after someone passes away? (UK)

6 November 2026 · Inherit Vault

Savings and shares don't stop paying out when their owner passes away. Interest and dividends keep landing for months. Who each payment belongs to comes down to one thing: the day it was paid.

The date of death draws the line

Anything paid up to the date of death belongs to the person who has passed away. Anything paid later belongs to their estate. Your executor collects it and holds it for the people who inherit. Our guide to tax on savings interest after a death covers what the estate then owes HMRC. This one is about who ends up with the money.

Interest goes by the day it reaches the account

Many banks add interest once a year. Say yours pays it every 31 December, and the account holder passed away on 10 November. Ten months of that interest built up while they were alive. For income tax, the whole payment still counts as the estate's income. HMRC's manual says interest credited after the date of death isn't split around that date.* So nobody has to work out a daily share for the tax return.

Inheritance Tax counts it the other way

This is the bit that catches executors out. For Inheritance Tax, interest builds up day by day. The value of an account at the date of death includes interest earned up to that day, even if the bank hadn't paid it yet.* So the same £300 can count in the estate's value and then count again as the estate's income. Two taxes, two calendars. Ask each bank for a letter showing the balance and the interest built up at the date of death. Most banks know the drill.

Dividends declared before, paid after

Companies announce a dividend weeks before they pay it. In that gap, the shares are marked "ex-dividend". If the person held shares with that mark when they passed away, the right to the dividend was already theirs. HMRC treats that right as part of the estate for Inheritance Tax, at its full value.* For income tax, a dividend counts on the day it becomes due and payable. If that day falls after the date of death, it's the estate's income. Not sure which shares exist? See how to find lost shares and unclaimed dividends.

Joint accounts skip the estate

Most joint accounts pass straight to the other holder. GOV.UK says you automatically inherit anything you owned as joint tenants. Interest paid after the date of death is then the survivor's own. It never reaches the estate. Interest paid before that date is normally split in half between the two holders for tax. There's more in our guide to joint bank accounts when someone passes away.

A named gift carries its own income

A will might leave a named thing to a named person. "My bank shares to my niece" is a typical line. The general rule is that the niece gets the income those shares earn from the date of death. So dividends paid during probate go to the niece along with the shares. The rest of the family doesn't share them. The same goes for a savings account left to one person.

A cash gift earns nothing in the first year

A fixed sum works differently. If the will leaves you £5,000, you get £5,000. You don't get a slice of the interest the estate earns while you wait. Slow estates are the exception. In England and Wales, interest on an unpaid cash gift normally starts one year after the death.* A will can set an earlier date. That year is known as the executor's year.

Everything else follows the residue

The residue is what's left once debts, tax and gifts are paid. The people who share the residue share the estate's income too. That means interest, dividends and rent that came in during probate. Income is split in the same shares as the rest. Half the residue brings half the income.

Form R185 shows what you received

The estate pays tax on its income first. When your executor passes income on, you should get form R185 (Estate Income). It shows your share and the tax already paid. Say your share of bank interest is £1,000. The estate pays £200 in tax at 20%.* You receive £800, and the form shows the £200. If you don't pay tax, you may be able to claim that £200 back. If you pay tax at a higher rate, you may owe a bit more. One rule changed on 6 April 2024. Income covered by the estate's £500 tax free amount isn't taxed when it reaches you.*

What an executor can do now

Go through each statement and mark the date of death on it. List what was paid before and what was paid after. Keep the banks' date of death letters. Note which accounts or shares the will leaves to a named person. Keep a running total of income for each tax year. With that done, the R185 forms take minutes.

The date decides who owns each payment. The harder job is knowing which accounts and shares exist to begin with. Keep a list of what you hold and where. Your family then won't have to find it out one stray dividend at a time.

Common questions

Short answers to what families ask most.

Who gets interest paid after someone passes away?

The estate does, unless the account was joint. Your executor passes it on to the people who inherit.

Who gets a dividend declared before death but paid after?

The estate gets it. If the shares were marked ex-dividend at the date of death, HMRC counts its value for Inheritance Tax as well.*

Does interest on a joint account go to the estate?

Usually no. A joint account normally passes to the surviving holder. Interest paid after the date of death is theirs.

Do I pay tax on income I receive from an estate?

The estate has usually paid tax on it already. Form R185 shows how much. You may owe more or be able to claim some back.

Do I get interest on a cash gift in a will?

You don't for the first year. After that, interest is normally due until the gift is paid.*

*Correct at the time of writing, 6 November 2026. These can change, so check with the organisation before you rely on them.

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