How is CGT paid in the year of death?
Answered 17 March 2026
Here is a comprehensive answer on how CGT is paid in the year of death.
CGT in the Year of Death
What the law says
Death is not a disposal. Under TCGA 1992 s.62(1), the assets of which a deceased person was competent to dispose shall not be deemed to be disposed of by them on death. Instead, the personal representatives (PRs) or other persons on whom the assets devolve are deemed to acquire those assets at their market value at the date of death.
CGT on pre-death disposals. Any CGT arising from transactions made by the deceased before the date of death remains chargeable on the deceased's estate for that tax year.
Assessment on personal representatives. CGT due from the personal representatives of a deceased person may be assessed and charged on and in the name of any one or more of those PRs (provided they are UK resident).
Carry-back of losses in the year of death. Under TCGA 1992 s.62(2), allowable losses sustained by the deceased in the year of death may, so far as they cannot be deducted from chargeable gains accruing in that year, be carried back and deducted from chargeable gains accruing in the three preceding tax years (taking later years first).
Annual Exempt Amount (AEA). The full AEA is available to the personal representatives for the year of assessment in which the death occurs, no matter how short that period is.
Time limit for assessment. Any assessment of the deceased's CGT liability for periods up to and including the date of death must be made within 4 years of the end of the year of assessment in which the person died.
HMRC guidance / practice
Settling the pre-death liability. The personal representatives must settle the CGT liability of the deceased up to the date of death with the responsible office. This includes any CGT on transactions occurring in the year of death prior to the date of death, and any open CGT liabilities for earlier years.
Who handles the liability. PT Operations Bereavement Team is responsible for finalising the liability and making any repayment due for all periods up to the date of death. For non-complex administration periods, the PR can settle the liability under a voluntary payment arrangement by providing a calculation of the tax due, and then making a one-off payment using a unique payment reference from the Bereavement Team.
Formal Self Assessment (complex estates). HMRC will issue formal Self Assessment Trust and Estate Returns (SA900) where:
- The total Income Tax and CGT due for the administration period exceeds £10,000;
- The estate value at death exceeds £2.5 million; or
- The proceeds of assets sold by the PRs in any one tax year exceed £500,000 (for deaths after 5 April 2016).
Residential property disposals. Any sale of residential property by the estate which results in a CGT charge must be reported and the tax paid to HMRC within 60 days of completion of the sale, using the CGT on UK Property Account.
Carry-back of losses — practical application. Losses carried back under s.62(2) are only set off so that the net chargeable gains are reduced to the amount of the AEA for the year in question. Any losses not set against gains accruing before death are lost — they cannot be used by the PRs or legatees.
Citation sources
If an individual realises an allowable loss in the part of the tax year before his or her death, those losses must be set first against any chargeable gains accruing in that period. This applies even if it reduces the net chargeable gains below the annual exempt amount for that year. If there is an excess of allowable losses after this set off those losses may be carried back and set off against gains accruing in the three tax years before the tax year of death. The losses must be set off agains
Any assessment of the deceased’s liability for periods up to and including the date of death must be made within 4 years of the end of the year of assessment in which the person died. For example Andrew died on 19 November 2015 and we need to assess his personal representatives in respect of a sum arising for the period prior to death. The end of the year of assessment in which Andrew died is 5 April 2016 so any assessment must be made by 5 April 2020. Any assessment on the personal representati
When someone dies, PT Operations Bereavement Team will be responsible for finalising the liability and making any repayment due for all periods up to the date of death. They are also responsible for finalising the liability for the period of administration for non-complex cases (TSEM7350 onwards). Most administration periods are considered non-complex, the personal representative should be able to settle any liability under the voluntary payment arrangement outlined by providing a calculation of
Personal representatives are concerned with three distinct areas of taxation, viz., Income Tax and Capital Gains Tax liabilities to the date of death the Inheritance Tax liability arising as a result of the death and Income Tax and Capital Gains Tax liabilities arising in the period of administration. Liabilities to date of death The personal representatives must settle the liability of the deceased up to the date of death with the responsible office. See TSEM7204. This will include any Capita
An estate for a deceased individual will use the Trust Registration Service (TRS) if the deceased’s personal representatives need to complete a Trust & Estate return (SA900) for the period of administration. This is the time between the day after the death and the date that the estate is settled or distributed to the beneficiaries. The Trust and Estate return has to be completed and submitted if there is chargeable income or gains to report and any of the following applies: the total Income Tax
CGT liability can be accounted for informally where the proceeds of sale of assets from the estate, are less than £500,000 in any one tax year and the total tax due, income tax and capital gains tax, is less than £10,000. Any sale of residential property which results in a capital gains tax charge, must be reported and the tax paid to HMRC within 60 days of completion of sale. Report and pay capital gains tax. One of the main aspects for HMRC to consider is the date of death value of the asset(