Renting out Deceased's property without Probate being carried out

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blinx
blinx Posts: 27 Forumite
in Deaths, funerals & probate
First of all, apologies if this is not in the right forum/thread, (if so perhaps Admin could move it to the appropriate place).

Anyway, my question is this: I know someone who is the Executor of a relative’s estate (the deceased’s only asset being a house). The Executor has been renting out the property for years and yet has not taken the Will Probate? Is this legal/right? Also are they suppose to pay tax on the rental income?
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  • TcpnT
    TcpnT Posts: 277 Forumite
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    Need a few more details here. The first question is was there a will and if so who was the house left to?

    Also was the house owned in the sole name of the deceased or jointly with someone else. If jointly was it as Joint Tenants or as Tenants in Common?
  • Tom99
    Tom99 Posts: 5,371 Forumite
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    [FONT=Verdana, sans-serif]Assuming the deceased was the sole owner of the property the property is now owned by the estate of the deceased. The estate is a tax entity in its own right quite apart from the deceased, the executors or the beneficiaries.

    [/FONT] [FONT=Verdana, sans-serif]The rental income belongs to the deceased estate and since an estate does not have any income tax personal allowance it would all be taxed at 20% subject to any other revenue deductions allowable.

    [/FONT] [FONT=Verdana, sans-serif]The responsibility for dealing with the estates tax affairs lies with the executor.[/FONT]
  • Dox
    Dox Posts: 3,116 Forumite
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    blinx wrote: »
    First of all, apologies if this is not in the right forum/thread, (if so perhaps Admin could move it to the appropriate place).

    Anyway, my question is this: I know someone who is the Executor of a relative’s estate (the deceased’s only asset being a house). The Executor has been renting out the property for years and yet has not taken the Will Probate? Is this legal/right? Also are they suppose to pay tax on the rental income?

    Why do you ask (could affect the amount of detail you need by way of a reply).
  • blinx
    blinx Posts: 27 Forumite
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    [FONT=&quot]Thank you for replies. To answer queries.[/FONT][FONT=&quot]
    [/FONT]
    [FONT=&quot]Yes there was a Will and it was left to a relative (Deceased’s sister) who is also the Executor. The Will was dated 1994 however and not brought to Probate, hence the question. The property was in the Deceased’s sole name and still is (property had no mortgage). I just wondered whether or not what she, the Executor, is doing is legal, someone told me that renting out a property without taking it to Probate is not how it should be done.[/FONT]
  • nom_de_plume
    nom_de_plume Posts: 959 Forumite
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    blinx wrote: »
    First of all, apologies if this is not in the right forum/thread, (if so perhaps Admin could move it to the appropriate place).

    Anyway, my question is this: I know someone who is the Executor of a relative’s estate (the deceased’s only asset being a house). The Executor has been renting out the property for years and yet has not taken the Will Probate? Is this legal/right? Also are they suppose to pay tax on the rental income?

    Would the estate be liable for inheritance tax? If so then it definitely should have been dealt with.

    Rental income should most certainly be declared to HMRC.
  • blinx
    blinx Posts: 27 Forumite
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    No it fell below the inheritance tax threshold apparently.
  • Brynsam
    Brynsam Posts: 3,643 Forumite
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    blinx wrote: »
    [FONT=&quot]Thank you for replies. To answer queries.[/FONT][FONT=&quot]
    [/FONT]
    [FONT=&quot]Yes there was a Will and it was left to a relative (Deceased’s sister) who is also the Executor. The Will was dated 1994 however and not brought to Probate, hence the question. The property was in the Deceased’s sole name and still is (property had no mortgage). I just wondered whether or not what she, the Executor, is doing is legal, someone told me that renting out a property without taking it to Probate is not how it should be done.[/FONT]

    Not really your concern, is it? Up to the executor, who takes the rap if she gets it wrong.
  • antrobus
    antrobus Posts: 17,386 Forumite
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    blinx wrote: »
    [FONT=&quot]Thank you for replies. To answer queries.[/FONT][FONT=&quot]
    [/FONT]
    [FONT=&quot]Yes there was a Will and it was left to a relative (Deceased!!!8217;s sister) who is also the Executor. The Will was dated 1994 however and not brought to Probate, hence the question. The property was in the Deceased!!!8217;s sole name and still is (property had no mortgage). I just wondered whether or not what she, the Executor, is doing is legal, someone told me that renting out a property without taking it to Probate is not how it should be done.[/FONT]

    Given that the executor and the beneficiary are the same person, I can't see there being a problem.

    I'm not sure why the estate has not gone to probate. If the deceased's only asset was the house it should be very straightforward. But I suspect it's your question about them paying tax that's the most relevant.

    I'd guess that the executor has not declared this income to HMRC. If you think so too, you can always shop 'em.
    https://www.gov.uk/government/organisations/hm-revenue-customs/contact/reporting-tax-evasion
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    blinx wrote: »
    [FONT=&quot]Thank you for replies. To answer queries.[/FONT][FONT=&quot]
    [/FONT]
    [FONT=&quot]Yes there was a Will and it was left to a relative (Deceased’s sister) who is also the Executor. The Will was dated 1994 however and not brought to Probate, hence the question. The property was in the Deceased’s sole name and still is (property had no mortgage). I just wondered whether or not what she, the Executor, is doing is legal, someone told me that renting out a property without taking it to Probate is not how it should be done.[/FONT]

    Executors powers come from the will

    Executor can rent out a house without probate subject to no exclusion in the will.

    The only persons that would care about this would be any beneficiaries.

    HMRC have an interest where taxes are due.
  • Malthusian
    Malthusian Posts: 10,938 Forumite
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    blinx wrote: »
    Also are they suppose to pay tax on the rental income?

    Only if their total income, after deducting the costs of the property, is above their Personal Allowance.

    Unless you are privy to full details of their finances I would leave well alone.
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