Paying CGT after death

I’ve recently sold my deceased mum’s property and cannot fathom if I need to pay CGT. She died October 2022 and the property was sold November 2023, with no gain in value in between these dates. (If anything it was overvalued at the point of applying for probate). Is this covered by the annual allowance and if there is no tax to pay does a return still need completing to ‘close the loop’ re the grant of probate? Thanks

Hi

If the property that was disposed of was part of the estate of the deceased, the estate will need to calculate whether there is any capital gains tax to pay.  
If there is, the estate will need to pay it.  If the property was bequeathed to beneficiaries of a will, such as the deceased's children, then on the death of the deceased, the property became an asset of the beneficiaries.  
When the property is disposed of, the each of the beneficiaries will need to work out if they had a capital gain liability arising from their share of the disposal.  
In either case, any capital gains tax payable will need to be reported and paid withing 60 days of the completion date.  
Please have a look at Tax when you sell property
There is a calculator that should help work out if there is a gain, as well as gudiance on reporting and paying any capital gains tax due.

Thank you

But what if there is no tax to pay (which I do not believe there is as the property was sold for the amount it was valued at when my mum died. If it is a nil return does a return still need to be completed??

Jess. Firstly, I’m sorry to hear of your loss. I’m not so sure the reply you have been given is strictly accurate. I have a similar situation to yourself ( selling a deceased’s Parent’s estate). I lost my Father last May and I am the Executor to his estate ( I assume you are the Executrix for your late Mum?). CGT is calculated on the gain between the value of an asset, which is assessed as being that at the time of death, and the eventual sale price. The gain starts on anything above the Annual Exemption Allowance- currently £6,000 per person. So if the sale price of your late Mum’s property did not exceed a gain of £6,000, from the estimated value at time of death, there is no CGT to pay- as you quite rightly mentioned. Even if there was a CGT liability, there are a number of costs which can be used to reduce the CGT liability, eg Solicitor’s fees, Estate Agent fees, any costs that you may have incurred in improving the property from the time of death to sale. I certainly do not understand the statement in the reply about each of the Beneficiaries having to assess if they have a CGT liability, based upon their share. That just is not correct I’m afraid. CGT is calculated on the whole estate (including anything else that may have been sold). It is for the Executor/Executrix to work out and pay any CGT, not the Beneficiaries. Unfortunately the reply you have received does not answer your question: is a return still required if there is not a CGT liability? I’m not sure to be honest and have asked HMRC on this forum the same question- albeit a slightly different scenario to yourself, but the question is the same. I haven’t received a reply yet. Re the grant of probate, there is no loop to close with regard to that. Once you receive the Grant, that is the end of the role for HMCT- they are totally independent body from HMRC. Finally, just be aware that in addition to CGT, income tax is payable (at a flat 20% rate), on any income received into the estate, from the time of death until finalisation. For example, if your Mum had savings in a bank or building society, any interest received during the period up to finalisation will attract tax at 20%. This can be paid to HMRC by sending them a cheque and a covering letter. I know this is correct as I was told this by the Accountant I am using to do my CGT return for me. I hope this is of some help to you Jess and that you get an answer to your question from HMRC

Hi Jess W,

If it is a UK residential property and there is no tax to pay, you do not need to report the sale.

Thank you. 

Great thanks

Hi , Can I please ask if it's a bare trust set up in a will and the beneficiary/trustee does not transfer the property to himself, is it the personal representative who has to decide to see if need to declare estate CGT or is it the beneficiary/trustee who has to decide he needs to declare the CGT? thank you. Kind regards

Hi L T
It will depend what is stated in the will.
As a starting point it would be for the personal representatives to deal with the estate.
Guidance at TSEM7350 may help. 
TSEM7350 - Table of contents; deceased persons: periods of administration
Thank you. 

I recently inherited a quarter of my parents house. I signed my share of the house over to my daughter using a deed of variation through a solicitor. The house was valued at 390k, which we felt was slightly under valued, but it was agreed that as my daughter wanted to keep the house she would buy the other beneficiaries out of the property. The sale value was agreed at 400k, meaning she would buy the property for 300k, as she already owned a quarter of the property through the inheritance. My question is do we owe capital gains tax on the notional price of 400k , so the 10k over the original lowest valuation. Or non as there has been no actual financial gain as the actual price paid was only 300k. The executor of the will is being very difficult and is not giving me any answers instead saying we may have to pay CGT on the 10k, but how can you pay tax on something that has not incurred a capital gain. Thank you from a vary confused person

Hi Deborah,
As you inherited 25% of the property on the death of your parents, you may have capital gains tax to pay on the difference between the probate value of the property and the market value at the time of disposal to your daughter.  
The market value must be used as the disposal was not at arms length (CG14541 - Consideration for disposal: market value rule: at arm's length and CG16330 - Assets: principles of valuation: meaning of market value).  
There is a capital gains calculator at Tax when you sell property, to help you work out the gain, that also allows you to register for a capital gains account, so that you can report and pay andy capital gains tax due, whithin 60 days of the completion date.
Thank you.