Probate & IHT - I can do this!

Bapster76

I thought I'd come back to update this, everything went smoothly with the house sale and it completed recently.  It sold for £50k more than the probate value, therefore, I will have CGT to pay. 

Does anyone know if I pay the CGT from the estate or the beneficiaries pay this separately?  

I used the online calculator but when going to pay it gives me the following options:

Who are you completing this return for?
A)Yourself
B)Someone you're helping
C)A person who made the disposal before they died 
D)The estate of a person and the property was sold after they died.

I'm not sure if I answer A or D on this.  Costs for selling the property was £10,201.  

I will confirm this with HMRC but just wondered if anyone knew?
Thanks

RAS

Did you transfer the house into the names of the beneficiaries? Or was it sold by the estate?

Bapster76

RAS said:

Did you transfer the house into the names of the beneficiaries? Or was it sold by the estate?

I'm the Executor and haven't transferred anything yet.  I will distribute the cash to the beneficiaries.  

Bapster76

I've spoken to HMRC Capital Gains team, they have said that there is no CGT to pay as its within the 9 months Private Residence Relief window and mum lived in the property right up to her death.  This was an interesting one to me and never knew about it.

poppystar

That’s the opposite to what the CG team told me a few years back - so either it’s changed or I’m really peeved! I was told the clock stops on death and restarts from that point on as a property of the estate without residence relief unless one of the beneficiaries are living there. 

mybestattempt

Bapster76 said:

I've spoken to HMRC Capital Gains team, they have said that there is no CGT to pay as its within the 9 months Private Residence Relief window and mum lived in the property right up to her death.  This was an interesting one to me and never knew about it.

I'm afraid you have been given the wrong advice.

The correct position is as @poppystar was advised.

This helpsheet HS283 at section 8 explains the position when the estate disposes of a property which was the residence of a deceased person:

https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2025#personal-representatives

The PRR of the deceased effectively ends at the date of death and cannot be extended beyond that date.

Bapster76

I asked them to make a note of the conversation on the account.   I'm not sure what else to do,   if this is the advice from HMRC.  

mybestattempt

Bapster76 said:

I asked them to make a note of the conversation on the account.   I'm not sure what else to do,   if this is the advice from HMRC.  

Unfortunately, neither telephone advice from frontline HMRC staff nor the HMRC Community Forum can be relied upon. (The latter states this in the terms and conditions and that it is not a substitute for official guidance.)

This is the official guidance from the Capital Gains Manual:

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65460 

That official guidance is set out more succinctly in the helpsheet HS283 which I provided a link to, and is the advice which should be followed.

You may, of course, wish to contact HMRC again and point out the telephone advice you received is at odds with both the CG  manual and helpsheet and ask for an explanation.

 

Bapster76

Thank you,  it does seem to contradict the advice I was given as none of the beneficiaries lived there before or post death.   

In your opinion what should I be selecting below on reporting the CGT

Who are you completing this return for?

A)Yourself

B)Someone you're helping

C)A person who made the disposal before they died 

D)The estate of a person and the property was sold after they died.

poppystar

D) surely,  if you are completing as executor?

It is effectively the estate that is liable for the CGT at the rate for an estate.