What if a residential property is sold?
Even when using the informal procedure, the 30-day Capital Gains Tax (CGT) reporting requirements are the same as those for a complex estate. Where an estate which qualifies for the informal procedure sells a UK residential property, and tax due is above the annual CGT exemption, HMRC has confirmed that the PRs need to report the sale on the CGT property disposals online service and pay the CGT within 30 days.
What should be a relatively straightforward and cost-effective method of administering an estate could turn out to be anything but, where UK residential property is sold.
The exception to this is where the estate will be finalised within the 30 days following the sale and can be reported by letter. A loss or gain within the annual CGT exemption does not have to be reported. The PRs will need to create an account in their own name to report the estate’s gain together with any gains they make in a personal capacity.
According to HMRC, an estate does not need to register on the Trust Registration Service to use the CGT property disposals online service, nor does it need a Unique Tax Reference (UTR) number. Alternatively, the PRs may be able to pass the property to the beneficiaries to sell and report themselves thereby making use of their own annual CGT exemptions.