Guide

Is There Capital Gains Tax When Someone Dies? CGT and Inheritance Tax

Written by James Whitfield · Last checked 19 October 2026 Checked against HMRC Helpsheet HS282 and GOV.UK

Quick answer

No. There is no Capital Gains Tax charge when someone dies.¹ Their assets pass at their market value on the date of death, so the gain built up during their lifetime is never taxed as a gain, and whoever inherits starts from that value.¹ Inheritance Tax is separate: it is charged at 40% on the part of the estate above the £325,000 threshold.³ CGT only comes back if the executors or the people who inherit later sell for more than the value at death.

Key facts (2026/27)

No CGT on death; assets are treated as passing at market value on the date of death, using the Inheritance Tax value where one has been agreed.¹
Gains the person made before they died, in the tax year of death, still have to be settled by the personal representatives.¹
Losses in the year of death can be carried back to the previous 3 tax years, latest first.¹
Executors selling during the estate administration pay CGT at 24%, with a full allowance for the tax year of death and the next 2 years.¹
A gift made in life is a disposal at market value for CGT, and can still count for Inheritance Tax if the giver dies within 7 years.⁶⁴
Figures checked 19 October 2026, before the Autumn Budget on 28 October 2026. We will update this page if the Budget changes them.

Why is there no CGT on death?

HMRC's helpsheet is direct: there is no CGT charge when someone dies. Instead, the personal representatives (the executors, or administrators if there is no will) are treated as acquiring the estate's assets at their market value on the date of death. Where a value has been ascertained for Inheritance Tax, that same value is used as the CGT cost.¹

This is often called the "uplift" on death. A house bought for £90,000 in 1998 and worth £400,000 at death carries no CGT on the £310,000 rise; the estate, and anyone who inherits it, starts from £400,000. When an asset is passed on to a beneficiary, they are treated as acquiring it at the personal representatives' value, on the date the personal representatives acquired it.¹

What about the gains the person made before they died?

Gains on sales in the tax year of death, up to the date of death, are still the deceased's. The personal representatives must agree the deceased's tax with HMRC, including a return for the year of death and any missing returns for earlier years.¹

Losses carry back. If the person made losses in the tax year they died that are more than that year's gains, the surplus can be carried back against their gains in the 3 tax years before death, later years first. Carried-back losses only reduce each year's gains down to the annual exempt amount, so the allowance for those years is not wasted.¹ That can produce a tax repayment for the estate. See how to claim a capital loss.

Who pays CGT after the death?

Who pays, and on what

Executors sell an asset during the administration	The estate pays on any rise since the date of death, at 24% for disposals since 30 October 2024, with a full £3,000 allowance in the tax year of death and the next 2 years
A beneficiary inherits and later sells	The beneficiary pays on any rise since the value at death, at 18% or 24% depending on their income, with their own £3,000 allowance
A surviving spouse or civil partner inherits	Same as any beneficiary for CGT: their cost is the value at death

Sources: HMRC HS282;¹ GOV.UK CGT rates.⁵ For a UK home with tax to pay, the seller must also report and pay within 60 days of completion.⁷ See CGT for executors and CGT on inherited property.

Worked example: giving a flat away now, or leaving it in a will

Margaret bought a flat in 2005 for £120,000. It has never been her home and is now worth £320,000. She is a higher-rate taxpayer and is thinking of giving it to her son.

The CGT on each route, 2026/27

Gift now: treated as a sale at market value, £320,000 − £120,000	£200,000
Less annual exempt amount	−£3,000
Margaret's CGT on the gift: 24% × £197,000	£47,280
Her son's future cost	£320,000
Left in her will: CGT on death	£0
Her son's future cost (value at death)	Value at death

A gift of UK residential property with tax to pay also needs a 60-day return.⁷ Buying and selling costs are ignored here. The Inheritance Tax side depends on the whole estate: the flat counts in her estate if she keeps it, and a gift can still be taxed if she dies within 7 years.⁴ Neither route is automatically better; it is a trade-off between CGT now and possible Inheritance Tax later.

Can you pay both CGT and Inheritance Tax on the same asset?

On death, Inheritance Tax may be due but CGT is not.¹³ Both can arise in two cases: a lifetime gift that is a disposal for CGT at the time and then falls into the Inheritance Tax calculation because the giver dies within 7 years,⁴ and an inherited asset that the executors or beneficiary later sell for more than its value at death. In the second case the CGT is only on the rise after death. If the estate sells land or shares for less than the probate value, an Inheritance Tax loss-on-sale claim may apply instead (forms IHT38² and IHT35; see the executors guide).

What is a deed of variation?

Beneficiaries can redirect what they inherit with a deed of variation. If it is made in writing within 2 years of the death and includes a statement that section 62(6) of the Taxation of Chargeable Gains Act 1992 applies, it is not a disposal for CGT and is treated as if it were in the will.¹

Frequently asked questions

Is there capital gains tax on death?

No. HMRC says there is no CGT charge when someone dies. Their assets are treated as passing at market value on the date of death, so the gain made during their lifetime is not taxed.

Is there CGT and inheritance tax on the same house?

Not at death: Inheritance Tax may be due, but CGT is not. CGT only arises if the executors or the person who inherits later sell for more than the value at death, and then only on that later rise.

What value do I use for an inherited property when I sell it?

The market value at the date of death. Where a value was agreed for Inheritance Tax, that value is the CGT cost.

Is it better to gift property before death or leave it in a will?

For CGT, leaving it in a will usually means no CGT, because the gain is wiped on death. A lifetime gift is treated as a sale at market value, so CGT can be due straight away, and the gift can still count for Inheritance Tax if the giver dies within 7 years.

What happens to capital losses when someone dies?

Losses in the tax year of death are set against that year's gains first. Any surplus can be carried back against the person's gains in the 3 previous tax years, latest first.

This page is general information, not legal or tax advice. Inheritance Tax and estate planning depend on the whole estate; take advice before making large gifts.

Sources & references

The rates, allowances and rules in this guide are drawn from the official HMRC and GOV.UK sources below, checked for the 2026/27 tax year. Each link opens the relevant government page in a new tab.

Verified against published HMRC and GOV.UK guidance.