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What Capital Gains Tax is payable by executors?

  • 2 min read
  • Last updated 2 Apr 2024

In this guide, we’ll help you understand what Capital Gains Tax is payable by executors.

After someone dies, their estate (money, possessions and property) is left to an executor named in their will.

The executor is legally responsible for taking care of their estate, which will likely include paying any taxes that are owed, including Capital Gains Tax.

Getting to grips with CGT now will put you in the best position when it comes to organising assets further down the line, helping you avoid any potential problems.

Have you been named as executor?

If someone you know has passed away and you’ve been named as an executor, you might be wondering what that means for you.

From securing a property after their death to paying outstanding taxes and organising their estate, there’s a lot to consider! You might also find there are others named as executors alongside you.

Being an executor might seem daunting at first, but we can help to simplify things when it comes to tax.

Am I responsible for tax?

Being an executor means you’ll have some tax responsibilities. This includes: 

Completing an inheritance tax return? Head to HMRC to download their inheritance tax forms.

Capital Gains Tax returns explained

Capital Gains Tax is a tax on the profit when you sell something. Our video below explains this in a little more detail!

Do executors have a Capital Gains Tax allowance?

In short, yes. Executors are entitled to a Capital Gains tax allowance that is separate from their personal CGT allowance.

As an executor, your Capital Gains Tax allowance is currently £3,000 for the 2024/25 tax year.

This means you can dispose of their assets up to this value, within this tax year, and not pay any CGT. Anything over £3,000 would be liable for Capital Gains Tax.

Your executor CGT allowance applies for the tax year they passed away along with the following two tax years.

What rate of Capital Gains Tax is payable by executors?

The rate of CGT for executors depends on the asset.

  • Sales of residential property – 24%
  • Any other assets – 20%

How to calculate Capital Gains Tax

When working out CGT as an executor, you’ll need to consider:

  • The acquisition cost – this is the value of the asset at the date of their death
  • The total of all asset sales made in the tax year – including any losses

You’ll also need to deduct the cost of selling the asset from the capital gain.

Let’s simplify things! If you sell the property as an executor and make a profit of £300,000, then £3,000 of the sale is exempt from Capital Gains Tax.

Capital Gains Tax is payable on the remaining £297,000 at a rate of 28% – meaning £71,280 Capital Gains Tax is due from the sale of the property.

Can TaxScouts take care of this?

Navigating Capital Gains Tax can be tricky for executors. But don’t worry, our team can help! Get in touch with us for one-off tax advice and we’ll match you with an accredited accountant for a fixed fee. You can learn more here.

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