Q&As

A UK residential property in an estate has been disposed of at a loss and the personal representatives wish to claim inheritance tax relief. Are they also obliged to report the disposal to HMRC within 30 days for the purposes of reporting capital gains tax on disposals of UK residential property?

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Published on LexisPSL on 18/06/2021

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • A UK residential property in an estate has been disposed of at a loss and the personal representatives wish to claim inheritance tax relief. Are they also obliged to report the disposal to HMRC within 30 days for the purposes of reporting capital gains tax on disposals of UK residential property?

A UK residential property in an estate has been disposed of at a loss and the personal representatives wish to claim inheritance tax relief. Are they also obliged to report the disposal to HMRC within 30 days for the purposes of reporting capital gains tax on disposals of UK residential property?

For general information on how gains/losses on disposals by PRs during the estate administration period are treated, see Practice Note: Income tax and capital gains tax during administration.

Formally, untaxed estate income and capital gains are to be reported under self-assessment on the Trust and Estate Tax Return SA900. However, for straightforward estates where the tax liability is relatively small HMRC adopts informal procedures to settle the tax affairs of the PRs. HMRC's approach to dealing with the income tax and capital gains tax (CGT) reporting requirements for deceased estates is set out in the Trusts, Settlements and Estates Manual from HMRC Manuals: TSEM7400 (Trusts, Settlements and Estates Manual). If the estate is a complex estate, the PRs will need to register online with the Estate Registration Service (ERS). See Practice Note: Estate Registration Service.

With effect from 6 April 2020,

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