Do I pay Capital Gains Tax on inherited property in the UK?

When you inherit a property, you don't pay Capital Gains Tax at the point of inheritance — that's when Inheritance Tax may apply instead.

CGT only comes into play if you later sell the inherited property and it has increased in value since you inherited it.

The gain is calculated from the probate value — the market value of the property at the date of death — not from what the original owner paid for it. So if the property was valued at £300,000 on probate and you sell it for £340,000, your gain is £40,000, not the full increase from the original purchase price.

A few things worth knowing:

If the property was the deceased's main home and you sell it within a certain period, some Private Residence Relief may be available.

If you rent the property out before selling, CGT applies in the normal way from the date of inheritance.

If there are multiple beneficiaries, each person is taxed on their own share of the gain. Our Joint (£449) or Trio (£598) filing options cover all owners in one service.

You must report and pay any CGT within 60 days of completion.

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