renting out inherited property

bigmickp

My sister and I inherited a property, selling is a slow burn at moment, can we as executors rent out the property, if yes , where does the rental money go, and is there capital gains tax to pay on the rent? 

RAS

Do you fully understand what is required before you even let out the house?

Tenancies in Eng/Wales: Guides for landlords and tenants — MoneySavingExpert Forum

And do you have the cash needed to meet all the requirements? And the cash to cope with repairs and voids? 

If the house is sold later for more than the price agreed for probate, the estate will have to pay CGT on the gain if it exceeds the CGT allowance. Unless it's transferred to you and your sister, in which case you pay CGT on half the gain and both have an allowance.

pumas

If you don't need it, sell it!

Maskface

My advice, don't put yourself though this. If you've never rented property before then get proper advice and educate yourself about being a landlord before you even contemplate it. Just sell it and invest the money or enjoy spending it. 

canaldumidi

bigmickp said:

My sister and I inherited a property,

Already? If Probate has not yet been granted then you have not yet inherited.

selling is a slow burn at moment, can we as executors rent out the property,

If you are acting as Executors, then Probate has not been granted....

Yes, as Executors you can decide to rent it out if that is in the best interests of the Beneficiaries (yourselvs). But is it?

 if yes , where does the rental money go,

Into the Estate until Probate is granted and you inherit the property.

and is there capital gains tax to pay on the rent? 

There is Income Tax on the rent- it's a complex area which you need to learn about and understand. The Estate will have to declare and pay this to HMRC. That is just one reason this may not be a good idea.

If you as Executors, or later you as Beneficiaries, sell the property for more than the value on the date of death (Probate value) then Capital Gains Tax may be due on the increase in value.

My advice is to sell, if necessary by reducing the price. If you sell for less than the Probate value (and Inheritance Tax has been paid) there is a mechanism for claiming back some of that Inheritance Tax.

Now read the link RAS supplied above......

bigmickp

we are fully aware that this is not an ideal situation, the property has no interest at moment and there are monthly expenses , we are aware that tax will have to be paid on rental income, but not too sure if we can rent as executors and if CGT is liable on rent

sammyjammy

If its not selling chances are its overpriced.

bigmickp

If its not selling chances are its overpriced.

Wrong, it's not selling for other reason I won't go into , but renting is easy 

Slithery

bigmickp said:

...but renting is easy 

No, it really isn't...

bigmickp

Slithery No, it really isn't...

we have experience, just want an answer to my questions 

Dazed_and_C0nfused

Slithery said:

bigmickp said:

...but renting is easy 

No, it really isn't...

I suspect the op meant finding someone willing to rent this particular property is easy.

What happens after day 1 obviously isn't always, if ever, easy.