Do beneficiaries pay CGT on an inheritance?

Not on receiving it. They acquire the asset at its probate value and only pay tax on gains after that if they later sell it.

Tax · 5 min read

Capital Gains Tax during the administration of an estate

There is no Capital Gains Tax on death — assets are rebased to their probate value. Gains only arise if the estate then sells an asset for more than that value.

Written and reviewed by Ramani Gill, Founder & CEO — Solicitor, TEP, BA, LLM. Last reviewed 2026-08-19.

The rebasing rule

Assets acquire a new base cost equal to their date-of-death value. A gain arises only on the increase between that probate value and the eventual sale price, less the costs of sale.

The estate's allowance

Personal representatives have an annual exempt amount for the tax year of death and the two following tax years
It is a single allowance for the whole estate, not one per beneficiary
Gains above it are taxed at the rates applying to trustees and personal representatives

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Appropriation: the planning point

If the personal representatives appropriate an asset to the residuary beneficiaries before selling it, the sale is treated as theirs. Each beneficiary can then use their own annual exempt amount and their own tax rate, which often removes the charge entirely.

The 60-day property rule

Where UK residential property is sold at a gain, a standalone return and payment are due within 60 days of completion — long before any self assessment deadline.

Losses

Losses made by the estate can be set against its gains in the same or later years of administration, but they cannot be passed to the beneficiaries.

GOV.UK — Capital Gains Tax

Common questions

Do beneficiaries pay CGT on an inheritance?: Not on receiving it. They acquire the asset at its probate value and only pay tax on gains after that if they later sell it.

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