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.

Hello - trying to work out if I need to file a CGT Return in relation to an administration of an estate. The residential property was sold for £10,000 less than estimated on the IHT return - but shares were sold for about £11,000 more: so there is a net gain of £1,000 (less costs of sale). So I do not think we owe any CGT, but do we need to file a return? Thank you

Hello, trying to understand the annual exemption amount that can be applied to sale of my deceased father's property. He died Dec 2022 and the property was sold in November 2024. Searching the various articles on the Gov.uk website turns up the following that was published in 2018. In the first para it says you MAY get the AEA from date of death to disposal. In my case 3 years. When filling in the online form it only gives me the option for one year AEA from the current year. Can anyone explain why it says you MAY get the AEA for multiple years and how do you apply that when reporting the sale? Many thanks Mike ++++++++++++++++++ Executors and personal representatives If you’re acting as an executor or personal representative for a deceased person’s estate, you may get the full annual exempt amount during the administration period. The administration period is the time it takes to settle the deceased person’s affairs, from the day after the death until the date everything has been passed on to beneficiaries. You’re entitled to the annual exempt amount for the tax year in which the death occurred and the following 2 tax years. This means one annual exempt amount against gains in each of those years. After that there’s no tax-free allowance against gains during the administration period.

Hi, Hope I have posted in correct manner! Ref CGT after probate after a trying emotional time.my question(s): I am the executor for my late Mother (passed away July23) I have two sisters. we are all beneficiaries. Potentially sold house for £900000. Probate valued (August 23) was £875000. Legal fees = 1674 Estate agent fees = 10800. I have lived in the house with my Mother since 2012 (I looked after her) I believe I am entitled to PPR Will CGT be payable? If so , how do I pay it? And once the sale id done do I have to let HMRC etc know? Or is that it? Just pass on my siblings their share and move on? I used my CGT allowance last May, I sold my flat, it was rented out, not my main home. I assume the estate is a "separate entity"? Finally , do my sibling have to do/ report anything after they have received their share? Its been an emotional time, any advice, answers appreciated, a sincere Thank you.

Hi Damian,
It depends on how long it is since the person passed away, as personal representatives are entitled to the annual exempt amount for the tax year in which the individual dies and the next two tax years.
Thank you.

HiWoodman Drive ,
This forum is for general queries only and is intended to help you self serve. We are unable to provide specific advice tailored to individual circumstances. You can see guidance here:
Capital Gains Tax: what you pay it on, rates and allowances
Thank you.

Ok. Understood. Can you just advise when all done, and no CGT payable, does one notify anybody eg HMRC or anyone else. Hope this is ok. Thank you.

Hi Mike Taylor,
For the timescale given, you still qualify for the 2024 to 2025 annual exemption of £3000 against the disposal.
Thank you.

Hi i do not know whether i have gone through the correct channels to ask a question? so i will say sorry in advance but my question is if my Solicitors have a capital gains tax return to submit and pay for on the sale of a deceased estate, is it just a matter of paying the CGT ? or do hmrc have to do their processing and how long does it take to process. I have been waiting 2 years for my inheritance and solicitors are dragging feet. please can you help.

Hi, I need some clarification on what CGT allowances can be applied when selling a property during probate. The executors of my late Aunts estate have sold her property - where there were 3 beneficiaries (two of whom are acting as executors). The property was not formerly transferred to the 3 beneficiaries, just sold by the two executors as part of the estate. After deducting the costs of sale, we realised £20K in capital gains, from the date of death (tax year 22/23) to the date of sale (tax year 24/25). Having read all the guidance, I believe that we can only deduct a SINGLE Capital Gains allowance of £3,000 for the sale in tax year 24/25. Then pay 24% capital gains tax on the remaining £17,000 gain. i.e. We need to pay HMRC approximately £4,000 in capital gains tax. I believe that we cannot utilise the individual beneficiaries capital gains allowances (i.e. 3 x £3,000) as it was the estate that made the sale rather the actual beneficiaries. Is this correct?

HI
You dont need to if there is nothing due.