Capital Gains Tax on Deceased Estate

[AKMild]

I am an personal representative of my late mother's estate. Her house was the only significant asset, so when probate is granted I shall be selling the house and distributing the proceeds amongst the beneficiaries of the will. If I sell the house for more than it was valued in the probate application, will I have to pay CGT on the difference?

[Barmaid]

It depends on how much the gain is. The executors have an annual allowance of £10,600 (I think - check this on HMRCS website). You can "roll up" the allowance for the year of death and following two years if the property does not sell in that time.

However, assuming it sells next week for £50k in excess of probate (unlikely I know), yes there will be CGT payable.

There is, however, a way to mitigate this. IF and only IF you are able to settle all her debts from assets other than the house and residue is therefore "ascertained", you can transfer the equitable interest in the property equally to all the beneficiaries and sell it on their behalf. That way, the gain is in the hands of the beneficiaries and NOT the personal representatives. If the beneficiaries each have unused personal CGT allowances there may be none payable. It can be quite tricky to get this right so it might be worth taking legal advice.

[buildersmate]

A very similar question was answered here only yesterday and the first part of Barmaid's answer aligns to my own answer.
If you haven't applied for probate yet and there is some headroom within the total estate value (before IHT kicks in) you could consider finding a 'friendly' estate agent to provide a generous valuation of the property and reflect that valuation on the probate form, thereby minimising the likelihood of selling later at a figure that could incure some CGT liability.

[buildersmate]

http://www.theanswerb.../Question1016512.html