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renting out inherited property

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Keep_pedalling Posts: 20,516 Forumite

8 June 2022 at 5:52PM

steampowered said:

bigmickp said:

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?

While the house is owned by the estate, rent would go into the estate.

Once the house has been distributed to the beneficiaries, the beneficiaries would become the new owners of the property. Rent would be paid to the beneficiaries from that point onwards.

Rent is subject to income tax. NOT capital gains tax.

I would have thought that income tax would be payable by the estate before the property has been distributed, and by the beneficiaries afterwards? You might want to check that with an accountant.

Estates do not get a personal allowance so IT will be payable on the entire rental profit. The OP does not say whether either of them already own a property but if either of them don’t then transferring ownership to the beneficiaries will cost them their first time buyer status.

CGT may come into play if the sale is delayed long enough for its value to go up.

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renting out inherited property

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