Rental of property before probate

tll123

I am an executor of my uncle's estate.
I understand that I cannot sell his house until probate is granted but is it possible to rent it out while waiting for probate ? If so, would the rental then form part of his estate?

Tim

fengirl_2

Yes, you can rent it out (assuming any other executors agree). The rental income will form part of the estate.

sloughflint

jimmo wrote: »

If it is rented out the executors will be responsible for declaring and paying Income Tax on the rental profits.

Would I be correct to think that the income tax rate here would be 40% as executors ( same as trustee rate?)?
Or could it be reduced to 20% if beneficiaries are basic rate tax payers?

localhero

pSloughflint,

The rate of income tax will depend on whether or not the beneficiaries have the right to the income.

Where they do in a straightforward probate case (presumably in the OP's case), the trustees are only liable for income tax at the basic rate (20%) and dividend ordinary rate (10%) depending on the type of income.

This contrasts to the situation where the beneficiary is not entitled to income (such as a beneficiary of a discretionary trust). Then the 'trust rate' would apply of 40% to non-dividend income.