Tax on rental income during probate, and capital gains when the estate sells

In England, estate rental income and estate CGT are dealt with by the personal representatives, not by treating the property as if it still belonged to the deceased. The income-tax and CGT rules are UK-wide in substance, but the legal end of the administration period is clearer in Scotland than in England, Wales and Northern Ireland.

Who pays the tax on rent the property earns between death and probate?

Tax on rent from a deceased landlord’s property is owed from the date of death, not from the date probate is granted, and the income is treated as the estate’s income in the hands of the personal representatives. HMRC’s estate manual states: “In general law the income that arises to the estate of a deceased person during the administration period is that of the personal representatives.” The tax can be assessed on an executor or administrator personally in that capacity, because TMA 1970 says: “Income tax charged on income arising to the personal representatives of a deceased person may be assessed and charged on, and in the name of, any one or more of the assessable representatives.” If the income is later distributed, the beneficiary may be taxed on it with credit for tax already paid by the estate: HMRC says, “The income then becomes chargeable income for any beneficiary who later receives it.” That answers what happens to rental income during probate: it is not the late landlord’s post-death income and it is not the beneficiary’s until paid or treated as paid to them.

How do you report an estate's rental income to HMRC?

An estate’s rental income is reported to HMRC either under HMRC’s informal estate arrangements if the estate is simple and within HMRC’s limits, or by registering the estate and filing an SA900 Trust and Estate Tax Return with SA903 property pages. From 2024/25, small estate income is ignored only where the personal representatives’ net income is no more than £500, because ITA 2007 states: “The de minimis estates amount is £500.” If the estate’s income exceeds that, GOV.UK says: “If the estate’s income is over £500, you must report all of the income and you cannot deduct the £500 tax-free amount.” HMRC’s informal route applies where the listed conditions are met; the manual introduces it this way: “Personal representatives report tax owed in the administration period by writing to HMRC (known as ‘informal arrangements’) if all the following apply:” If those arrangements cannot be used, GOV.UK says: “If you cannot use informal arrangements you must register the estate online and send a Self Assessment tax return for the estate.” For a rental property, the SA903 pages are the property-income pages, because HMRC says: “Use the SA903 supplementary pages when filing an SA900 Trust and Estate Tax Return to record income from land and property.” For an informal estate that stays informal, ICAEW reports HMRC’s 2026 position that income and gains are reported once at the end of the administration period, not after every tax year.

When does the administration period of an estate end?

For estate tax, the administration period starts on the date of death and usually ends when the residue has been ascertained; in Scotland that end point is fixed in statute, while in England, Wales and Northern Ireland the statute says only that the period ends with completion of the administration. ITTOIA 2005 defines the administration period as “the period beginning with the deceased's death and ending with the completion of the administration of the estate.” For Scotland, the same section is more precise: the end is “the date at which, after discharge of, or provision for, liabilities falling to be met out of the deceased's estate, the free balance held in trust for the residuary legatees or for the persons with the right to the intestate estate has been ascertained.” HMRC’s CGT helpsheet uses the same practical tax point across the UK, saying the period “starts on the date of death of the deceased person and usually ends for tax purposes when the residue of the estate has been ascertained.” That can be before the assets are actually handed over, because HMRC’s Capital Gains Manual says: “Once that point is reached residue is ascertained and it is irrelevant that the assets have not been distributed.”

How is capital gains tax worked out when an estate sells a rental property?

For any personal representatives’ disposal on or after 30 October 2024, CGT is 24% on all assets including residential property, not the 28% rate still quoted on older pages. TCGA 1992 s.1H states: “Chargeable gains accruing in a tax year to the personal representatives of a deceased individual are charged to capital gains tax at a rate of 24%.” HMRC’s 2026 HS282 confirms the same rule in plain terms: “For disposals on or after 30 October 2024 the rate of CGT applying to all assets for personal representatives is 24%.” The gain is not measured from the deceased’s original purchase price; TCGA 1992 treats the asset as acquired on death “for a consideration equal to their market value at the date of the death.” The estate can use the annual exempt amount only for the year of death and the next two tax years, and the current amount is £3,000: “The annual exempt amount for a tax year is £3,000.” For UK residential property, the estate’s CGT return is due within 60 days of completion, because FA 2019 Schedule 2 says the taxpayer “must deliver the return to an officer of Revenue and Customs on or before the 60th day following the day of the completion of the disposal.” Unused CGT losses of the deceased do not carry into the estate; HMRC says: “Any unused losses incurred by the deceased before the date of death cannot be brought forward to set against capital gains of the personal representatives.”

Can an estate reduce the capital gains tax on selling a rental property?

A rented property does not get a special CGT relief just because it was rented; the practical CGT-saving route is usually to appropriate the property to beneficiaries before sale so each beneficiary can use their own £3,000 annual exempt amount. Letting relief is not an estate relief: TCGA 1992 s.223B applies where “a gain to which section 222 applies accrues to an individual,” and a personal representative selling an estate asset is not selling as that individual. Private residence relief for personal representatives is also narrow: TCGA 1992 s.225A requires that, “immediately before and immediately after the death of the deceased person,” the dwelling was someone’s only or main residence, which a tenanted buy-to-let will normally fail. Passing the property to a beneficiary is not itself a CGT disposal by the personal representatives, because TCGA 1992 s.62 says “no chargeable gain shall accrue to the personal representatives.” In England and Wales, the statutory power is appropriation: AEA 1925 s.41 says “The personal representative may appropriate any part of the real or personal estate” towards a beneficiary’s share. The saving is arithmetic, not a hidden rental-property relief: five beneficiaries with five £3,000 allowances can cover a £15,000 gain, while an estate sale with one £3,000 allowance leaves £12,000 taxable at 24%.

Last reviewed August 2026.

Sources

• HMRC Trusts, Settlements and Estates Manual TSEM7453 — “In general law the income that arises to the estate of a deceased person during the administration period is that of the personal representatives.” Source
• Taxes Management Act 1970 s.30AA — “Income tax charged on income arising to the personal representatives of a deceased person may be assessed and charged on, and in the name of, any one or more of the assessable representatives.” Source
• HMRC Trusts, Settlements and Estates Manual TSEM7453 — “The income then becomes chargeable income for any beneficiary who later receives it.” Source
• Income Tax Act 2007 s.24B — “The de minimis estates amount is £500.” Source
• GOV.UK probate estate reporting guidance — “If the estate’s income is over £500, you must report all of the income and you cannot deduct the £500 tax-free amount.” Source
• HMRC Trusts, Settlements and Estates Manual TSEM7410 — “Personal representatives report tax owed in the administration period by writing to HMRC (known as ‘informal arrangements’) if all the following apply:” Source
• GOV.UK probate estate reporting guidance — “If you cannot use informal arrangements you must register the estate online and send a Self Assessment tax return for the estate.” Source
• HMRC SA903 guidance — “Use the SA903 supplementary pages when filing an SA900 Trust and Estate Tax Return to record income from land and property.” Source
• ICAEW, HMRC clarifies formal and informal reporting for estates — “Where an estate is informal and stays informal, income and gains should be reported once, at the end of the administration period (ie, not every year).” Source
• Income Tax (Trading and Other Income) Act 2005 s.653 — “In this Chapter ‘the administration period’, in relation to the estate of a deceased person, means the period beginning with the deceased's death and ending with the completion of the administration of the estate.” Source
• Income Tax (Trading and Other Income) Act 2005 s.653 — “In the application of subsection (1) to Scotland, the reference to the completion of the administration is to be taken as a reference to the date at which, after discharge of, or provision for, liabilities falling to be met out of the deceased's estate, the free balance held in trust for the residuary legatees or for the persons with the right to the intestate estate has been ascertained.” Source
• HMRC HS282, Death, personal representatives and legatees — “It starts on the date of death of the deceased person and usually ends for tax purposes when the residue of the estate has been ascertained.” Source
• HMRC Capital Gains Manual CG30810 — “Once that point is reached residue is ascertained and it is irrelevant that the assets have not been distributed.” Source
• Taxation of Chargeable Gains Act 1992 s.1H — “Chargeable gains accruing in a tax year to the personal representatives of a deceased individual are charged to capital gains tax at a rate of 24%.” Source
• HMRC HS282 2026, Death, personal representatives and legatees — “For disposals on or after 30 October 2024 the rate of CGT applying to all assets for personal representatives is 24%.” Source
• Taxation of Chargeable Gains Act 1992 s.62 — “(a)shall be deemed to be acquired on his death by the personal representatives or other person on whom they devolve for a consideration equal to their market value at the date of the death, but” Source
• Taxation of Chargeable Gains Act 1992 s.1K — “(2)The annual exempt amount for a tax year is £3,000.” Source
• Taxation of Chargeable Gains Act 1992 s.1K — “(7)For the tax year in which an individual dies and for the next two tax years, this section applies to the individual's personal representatives as if references to the individual were to those personal representatives.” Source
• Finance Act 2019 Schedule 2 paragraph 3 — “(b)must deliver the return to an officer of Revenue and Customs on or before the 60th day following the day of the completion of the disposal.” Source
• HMRC Capital Gains Manual CG30540 — “Any unused losses incurred by the deceased before the date of death cannot be brought forward to set against capital gains of the personal representatives.” Source
• Taxation of Chargeable Gains Act 1992 s.223B — “(a)a gain to which section 222 applies accrues to an individual on the disposal of, or of an interest in, a dwelling-house or part of a dwelling-house, and” Source
• Taxation of Chargeable Gains Act 1992 s.225A — “(2)The first condition is that, immediately before and immediately after the death of the deceased person, the dwelling-house or part of the dwelling-house mentioned in section 222 (1) was the only or main residence of one or more individuals.” Source
• Taxation of Chargeable Gains Act 1992 s.62 — “(a)no chargeable gain shall accrue to the personal representatives, and” Source
• Administration of Estates Act 1925 s.41 — “(1)The personal representative may appropriate any part of the real or personal estate, including things in action, of the deceased in the actual condition or state of investment thereof at the time of appropriation in or towards satisfaction of any legacy bequeathed by the deceased, or of any other interest or share in his property, whether settled or not, as to the personal representative may seem just and reasonable, according to the respective rights of the persons interested in the property of the deceased:” Source
• Kerseys, probate and deeds of variation — “Each beneficiary can therefore apply their annual tax-free allowance (£3,000 in 2024-5 tax year) against their one-fifth share of the gain of £15,000 on the property.” Source