Mark Taylor

Thank you.

Good morning. I am in the process of finalising my late Father’s estate. My Accountant has advised me that any income received (eg. Building Society interest), from the date of passing until finalisation, is taxed at a flat rate of 20%. Does this include refunds from utilities: Telephone and Water Supply? I understand that this is reported to HMRC on a letter with an accompanying cheque for the tax due- is this correct? Thank you.

Thank you for clarifying that for me. Regards.

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

I am the Executor to my late Father’s estate. The estate comprises a bungalow, gardens and a piece of land to the rear. Before the estate went on the open market for sale, a price was agreed for a section of the land (STC) to an adjacent neighbour. A price has also now been agreed for the bungalow and remaining land and is awaiting exchange of contracts and completion. Completion of the sale of the separate section of land to the neighbour took place on 21st December 2023. My Accountant has calculated for me what the Capital Gains Tax liability will be on the whole estate. Inheritance Tax is not applicable. The sale of the separate section of land to the neighbour is,in itself, not subject to CGT- the gain between the estimated value of that section of land at the time of my Father’s passing and the subsequent agreed price, being £3,000. However, this land does form part of the overall estate, which is subject to Capital Gains Tax- effectively there are two separate transactions. My question is: Do I need to report anything to HMRC, at this juncture, in respect of the sale of the separate section of land to the neighbour? Or is it swept up with the Capital Gains Tax return when the remaining sale is completed- expected to be in a couple of months time. Thank you.

Thank you very much. Kind Regards

Thank you for your clarification. Kind Regards

Thank you for your reply. Can I just clarify; Is any amendment to the probate value done at the time the Capital Gains Tax return is submitted? Or is it actioned before Probate is granted and then reported as part of the CGT return? Thank you 

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Thank you so much for the clarification. Kind Regards 

Good morning. Can anyone advise me please on how any tax due is reported to HMRC in respect of interest on Building Society Accounts. This is with regard to an account of a Deceased Person- I am dealing with their Estate . Does a deceased person still have a PSA for their savings? Thank you 

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