What Capital Gains Tax is Payable by Executors? 2026/27 UK Guide

Administering an estate requires executors—legally termed Personal Representatives (PRs)—to manage and often dispose of the deceased’s assets. If you are handling an estate in the 2026/27 tax year and asking, what Capital Gains Tax is payable by executors?, you must navigate recent rate changes, strict property reporting deadlines, and specific tax-free allowances.

This guide outlines exactly how HMRC taxes estate gains, how you calculate the base cost, and when you can legally avoid Capital Gains Tax (CGT) by transferring assets directly to beneficiaries.

1. Establishing the Base Cost: The “Probate Value”

The act of dying does not trigger a CGT charge. Section 62(1)(b) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) explicitly states that assets are not deemed to be disposed of by the deceased upon their death.

Instead, the law automatically resets the baseline value of the deceased’s assets. Under section 62(1)(a) of TCGA 1992, personal representatives are deemed to acquire the assets at their market value at the exact date of death.  Practitioners commonly refer to this as the “probate value”.

If the estate paid Inheritance Tax (IHT), HMRC typically accepts the date of death value agreed for IHT purposes as the acquisition cost for CGT.  If the estate did not pay IHT, HMRC may scrutinise the date of death valuation more closely when you eventually sell the asset.

2. Selling Estate Assets: The 24% CGT Rate (2026/27)

If executors sell an asset during the administration period for more than its probate value, the estate realises a capital gain.

Following the Finance Act 2025, the government radically simplified the CGT rates for personal representatives. From 30 October 2024 onwards, personal representatives pay a flat 24% CGT rate on all chargeable gains.

“in subsection (6) (which sets out the rates for gains accruing to personal representatives that are not residential property gains or carried interest gains), for ‘20%’ substitute ‘24%'”

This 24% flat rate applies universally to sales of residential property and to other assets (such as shares or antiques) handled by the estate.  Unlike individual taxpayers (who pay 18% at the basic rate and 24% at the higher rate), personal representatives do not have a basic rate band and pay the 24% rate on all taxable gains.

3. The Executor’s Tax-Free Allowance (£3,000)

Executors do not pay tax on every penny of profit. Section 1K(7) of TCGA 1992 grants personal representatives access to the Annual Exempt Amount (AEA).

For the 2026/27 tax year, the AEA is £3,000.

Personal representatives receive this full £3,000 exemption for the tax year in which the individual dies, and for the following two tax years.  If the administration of the estate continues beyond this three-year window, the executors lose access to the annual exemption entirely for any subsequent years.

4. Selling vs. Transferring to Beneficiaries

You can completely eliminate the estate’s CGT liability by transferring (appropriating) an asset directly to a beneficiary rather than selling it on the open market.

Under section 62(4)(a) of TCGA 1992, no chargeable gain accrues to the personal representatives when they transfer an asset to a legatee (beneficiary).  Instead, the beneficiary is treated as having acquired the asset at the exact same time and for the exact same cost (the probate value) as the executors.

If the beneficiary later sells the asset, they will pay CGT based on their own personal tax rates and can utilise their own personal Annual Exempt Amount. This makes transferring assets highly tax-efficient if the beneficiary sits in a lower tax bracket than the flat 24% executor rate.

5. Reporting and Paying CGT: The 60-Day Rule and Informal Procedures

If the executors sell an asset and trigger a CGT liability, strict reporting rules apply depending on the asset type and the estate’s total value.

The 60-Day UK Property Rule

If executors sell UK residential property and a CGT charge arises, they must report the disposal and pay the tax to HMRC within 60 days of the sale’s completion date.  Non-UK resident executors must report all disposals of UK property within 60 days, even if no tax is due or the sale resulted in a loss.

Informal Payment Procedures

For standard estate assets (like shares), executors normally report gains via a Trust and Estate Self Assessment tax return. However, HMRC offers “informal payment procedures” to save time on smaller estates.

You can account for CGT informally without registering for a full Self Assessment return if:

1. The total proceeds from the sale of assets from the estate are less than £500,000 in any one tax year; and
2. The total tax due (income tax and capital gains tax combined) is less than £10,000.

Summary Table: Executor CGT Rules 2026/27

Consider reviewing the estate’s current asset portfolio to identify which highly appreciated assets should be appropriated directly to basic-rate beneficiaries prior to sale, thereby avoiding the estate’s flat 24% CGT rate and maximising available individual tax allowances.