Last updated: 14 October 2026
Is there Capital Gains Tax when a deceased person’s share of a property is sold?
There’s no Capital Gains Tax on death itself. The deceased person’s share of the property is valued at the date of death, and that probate value becomes the base cost for whoever sells it next. So CGT is only due on any rise in value of the deceased’s share between the date of death and the sale. The surviving co-owner’s own share is taxed in the normal way, based on what they originally paid.
Two shares, two calculations
| Share | Base cost | Who pays CGT on a sale |
| Deceased’s 50% share | Probate value at date of death | Executors, or the beneficiary if transferred to them first |
| Survivor’s 50% share | Original purchase cost of that share | The surviving co-owner |
If the property was owned as joint tenants, the deceased’s share passes automatically to the survivor, who then owns two parts with different base costs. As tenants in common, the share passes under the will, often to the executors first.
Example
Rhys and his brother Owen owned a rental flat as tenants in common, bought for £150,000. Owen died in March 2026, when the flat was worth £250,000, and his half passed to his daughter. In October 2026, the flat sells for £260,000, with £6,000 of selling costs.
- Owen’s daughter: half the sale price, £130,000, less half the probate value, £125,000, less £3,000 selling costs, is a £2,000 gain. That’s covered by her £3,000 annual exempt amount.
- Rhys: £130,000, less his £75,000 cost, less £3,000 selling costs, is a £52,000 gain. After his own £3,000 exempt amount, he pays CGT at 18% or 24% on £49,000.
Selling during administration
If executors sell the property, they have their own £3,000 annual exempt amount in the tax year of death and the following 2 tax years. They pay CGT at 24% on residential property gains. If the gain is small, it’s often better for executors to sell. If it’s large, transferring the property to beneficiaries first lets each one use their own exempt amount and basic rate band.
Main residence relief
If the property was the deceased’s home, relief on their share ended with their death, and the probate value resets the gain. Executors can claim private residence relief if beneficiaries entitled to at least 75% of the proceeds lived in the property as their main home both before and after the death.
Reporting
Any CGT on the sale of UK residential property must be reported and paid within 60 days of completion, by the executors or the person selling. Executors report on behalf of the estate through the trusts and estates service.
Inheritance Tax
The deceased’s share may also be subject to Inheritance Tax as part of their estate. A jointly owned property is usually valued with a small discount for joint ownership if it was owned with someone other than a spouse.
Frequently asked questions
Do I need a formal valuation?
Yes, the probate valuation should be realistic, as HMRC can challenge it.
What if the property sells for less than probate value?
The seller has a capital loss. If Inheritance Tax was paid, executors who sell within 4 years of death may be able to claim the lower sale price as the value for IHT.
Does the survivor get a base cost uplift?
Only on the share they inherit.
Who pays if the estate has no money?
The executors must pay it from the sale proceeds.
Related: CGT on a jointly owned property, inheritance tax on a deceased person’s gift and the CGT reporting deadline.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with CGT on an inherited share of a property. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
