the property has not been put into the names of the beneficiaries. The executors are still acting on behalf of the estate.
There has been no income since the death of my mother. There have been costs for repairs.
Hi again.If you are concerned about the tax office challenging the probate value of the property, so long as the valuation was based on the market value of similar properties at the time and can be defended, you should have no problems. If you do, I'd encourage you to take professional advise from a local land agent. Apart from the general rise in property prices, you said it was run down and needed work to put in into a saleable state which would have enhanced its value. The cost of capital improvements can be added to the probate value when calculating the gain on the sale of the property. There are some notes on valuing estate property here. You may have read these already.A deceased estate qualifies for a CGT exemption for the tax year in which death occurred and for each of the following two tax years. Take a look here for more on that. After that, no exemption is due. Any gain that remains after the deduction of the annual CGT exemption if one is due will be taxed at 28%.If you transfer the property into the names of the beneficiaries before it is sold, each one will be entitled to their CGT exemption to offset against their respective shares of the gain. As the rate of CGT applied to individuals is 18%, 28% or a combination of the two rates depending on that individual's income level, it may be beneficial to transfer the property out of the estate before its sale so that the benefit of multiple CGT exemptions and the possibility of lower CGT liabilities can be had.If the property is sold by the estate, it will be necessary to complete an estate tax return for the tax year in which the property is sold. The form for 2013/14 can be found here. Clearly, if you sell the property in the current tax year, 2014/15, you will complete an estate tax return for that year.If the property is put into the beneficiaries names before its disposal, they will each need to disclose their share of any gain in a tax return of their own.Finally, there are some notes on Inheritance Tax here and on the transfer of an unused Inheritance Tax nil-rate band here.I hope this helps but let me know if you have any further questions.