HMRC Guidance for Trusts and Estates: Latest Updates

Last reviewed: 24 May 2026 by the MP Estate Planning editorial team. Jurisdiction: England and Wales. Scotland and Northern Ireland have different probate and intestacy rules; the IHT thresholds are UK-wide.

We’ve written this short introduction to explain the current HMRC online rules for executors and personal representatives dealing with an estate’s tax affairs during the administration period.

In plain terms, the process tells you how to register an estate for Income Tax and Capital Gains Tax while the administration period is open — that is, the period between the date of death and the final distribution of assets to beneficiaries.

That matters because an estate can have its own tax position even after the deceased’s personal tax affairs are closed. Many families don’t realise this. Missing it can lead to unexpected bills and HMRC penalties.

We will set clear expectations about when to register, what to do online via the Government Gateway, and the common deadlines that catch families out every year.

We speak from experience: straightforward homeowner scenarios — selling a property during the administration period, or bank interest accumulating in an estate account — show exactly why this matters.

Follow the steps and you should see fewer delays, fewer fines, and a smoother route to distributing assets to beneficiaries.

Key Takeaways

• Register estates for Income Tax and Capital Gains Tax when HMRC thresholds are met.
• Use the Government Gateway and HMRC online services for estate administration tasks.
• Look beyond the Grant of Probate and Inheritance Tax — Income Tax and CGT during administration are separate obligations that many families overlook.
• Common scenarios like selling the family home during administration create taxable events for the estate.
• Proper handling reduces penalties and speeds up distributions to beneficiaries.

What’s changed in HMRC guidance for estates, trustees and personal representatives

HMRC guidance now draws a clearer line between the tax position that applies while an estate is being administered and the Inheritance Tax work that deals with the deceased’s estate value at the date of death.

The guidance emphasises that income arising between the date of death and final distribution can create reporting duties for those administering the estate. This includes bank interest, rental income from any properties in the estate, and dividends from shares or investments. Personal representatives (executors or administrators) and trustees must monitor these receipts closely.

Capital gains can also arise during the administration period. When a personal representative sells property or investments, that disposal can trigger Capital Gains Tax (CGT) — even though beneficiaries have not yet received their inheritance. For residential property, CGT is charged at 24% (for higher and additional rate taxpayers) or 18% (for basic rate taxpayers). For other assets, the rates are 20% and 10% respectively. Note that these rates were updated in the October 2024 Budget, so always check the rates that apply for the tax year of the disposal.

In practice, this means you cannot assume obtaining the Grant of Probate and paying the IHT bill settles all tax matters. The administration period is a live tax period for Income Tax and CGT, and responsibility sits squarely with those running the estate — typically the executors named in the will or the administrators appointed under the intestacy rules.

• Key point: Income Tax and CGT reporting during the administration period is a separate obligation from IHT — and it catches many families off guard.
• Who is responsible: personal representatives (executors or administrators) are legally responsible for reporting and paying these taxes. Where a trust arises under the will, trustees take on responsibility for trust income and gains — for example, where a will trust holds property for a surviving spouse as life tenant, the trustees must account for any income or gains within that trust arrangement.
• We suggest checking the HMRC thresholds early and considering whether you need to register for Trust and Estates Self Assessment to avoid missed returns and penalties.

For practical help on handling capital gains during administration, see our page on preparing for capital gains tax updates.

When you must register an estate with HMRC and start Trust and Estates Self Assessment

Start by checking whether the estate meets one of three straightforward thresholds for registration.

If any one of these tests applies, you must register the estate and file a return.

Value at date of death

Over £2.5 million in total value at the date of death triggers registration. This valuation usually includes property, investments, bank balances, personal possessions and any other assets the deceased owned. With the average home in England now worth around £290,000 and the Inheritance Tax nil rate band frozen at £325,000 (gov.uk — Inheritance Tax) since 2009, more estates than ever are reaching significant values — though this £2.5 million threshold only applies to the largest estates.

Assets sold in the tax year

Personal representative disposals totalling over £500,000 in a single tax year require registration and filing. Selling the family home along with an investment portfolio can easily push you past this level — with the average home in England now worth around £290,000, adding investments, a buy-to-let property or other assets often tips the balance.

Combined tax due in the administration period

If the total Income Tax and Capital Gains Tax due for the entire administration period exceeds £10,000, registration is required. This test looks at the combined tax owed, not the total asset value. An estate with significant rental income or a large gain on a property sale can trigger this threshold even where the estate itself is relatively modest.

After registration, HMRC issues a Unique Taxpayer Reference (UTR) for the estate. You must then file a Trust and Estates Self Assessment return (form SA900) covering the administration period.

Quick decision path: if any threshold is met, register. If none apply, keep clear records and review the position each tax year — circumstances can change if additional income accrues or an asset sale pushes you over the limit.

Don’t wait until the end of the administration. Delays in obtaining property valuations or receiving sale completion statements are among the most common reasons for late registration — and late registration means penalties on any unpaid tax liabilities.

It’s also worth noting that even if you fall below all three thresholds, some Income Tax or CGT may still be due. In those cases, HMRC allows you to settle the liability informally by letter rather than through Self Assessment — but you still need to keep proper records and pay the tax owed.

How to use HMRC trust and estate guidance to register and manage an estate online

Start by securing a Government Gateway account so you can act calmly and on time.

Why start early: setting up your online access before deadlines arrive reduces mistakes and last-minute stress. Keep your login details safe and share access only with authorised individuals — typically co-executors or your appointed tax agent.

Setting up and using online services

Create or use an existing Government Gateway username and password. Once registered for the Trust and Estates service, the online portal lets you add the estate’s details, update the personal representatives on record, and appoint an authorised tax agent if needed. Remember that the estate is also likely to need registering on the Trust Registration Service (TRS), which is a separate registration from the Self Assessment registration — all UK express trusts, including those created by a will, must be registered on TRS.

Appointing an agent

Appointing a tax agent — typically a chartered accountant or chartered tax adviser — is sensible where the estate involves multiple properties, significant rental income, or complex capital gains calculations. The law — like medicine — is broad, and you wouldn’t want your GP doing surgery. We recommend professional help whenever tax liabilities are likely to be substantial. For practical steps, see our advice on registering as an agent.

Ending the administration period

When all assets have been distributed and tax liabilities settled, you need to tell HMRC the administration period has ended. Complete the final form SA900 (Trust and Estate Tax Return) — this can be filed online or on paper. This closes the estate’s tax account. For the official online route, follow the government’s service page: manage your trusts registration service.

“Keep clear records throughout: sale proceeds, income statements, dates of transactions and who acted on behalf of the estate. Good record-keeping is the single most effective way to avoid problems with HMRC.”

• Keep paperwork organised for each tax year the administration spans.
• Update contact details and personal representative changes with HMRC promptly.
• File the final SA900 return to close the estate’s tax account.
• Remember that the full probate and administration process typically takes 3–12 months, and longer where property needs to be sold — plan your tax affairs around that timeline.

Reporting and paying tax during the tax year: returns, UK property CGT and avoiding penalties

Selling property during the administration period calls for separate, time-sensitive steps that many families are unaware of.

When personal representatives sell UK residential property during the administration period, they must report the gain and make a payment on account of CGT within 60 days of completion. (Note: this was originally 30 days when the rules were introduced in April 2020, but was extended to 60 days from 27 October 2021.) Meet that deadline to avoid automatic late filing penalties and interest charges.

For the capital gains calculation, you need to record the completion date, the probate value of the property (which becomes the base cost for CGT purposes), the sale price, and any allowable selling costs such as estate agent fees, solicitor fees and conveyancing costs. These figures shape the chargeable gain and the rate of tax applied. Be aware that CGT rates changed in the October 2024 Budget and further changes may follow, so always check the rates that apply for the tax year of disposal. The estate also has its own annual exempt amount for CGT — currently set at half the individual level — which can reduce the taxable gain.

Reporting a property gain via the UK property disposal service (sometimes called the “60-day report”) is separate from filing the wider Trust and Estates Self Assessment return for the tax year. Both may be required. Missing either creates separate penalties — they are independent obligations.

• Common causes of late filing: waiting for final sale accounts from solicitors, missing broker statements for investment sales, delayed completion statements, and simply not knowing the 60-day rule exists.
• Interest and penalties: HMRC charges start to build from the payment due date. Interest runs on late-paid tax, and fixed penalties apply for late filing — currently £100 for up to 3 months late, with further daily and percentage-based penalties after that.

A practical checklist to gather early: completion statements from the conveyancer, probate valuations for all assets, estate agent invoices, bank interest certificates, dividend statements and broker paperwork. Keep them together from day one and act promptly — 60 days passes faster than most families expect.

One important point that families often overlook: if the deceased’s property was their main home, it will have had principal private residence relief up to the date of death. But after death, the property is held by the estate — and any increase in value between the probate value and the sale price is a chargeable gain for the estate. There is no automatic PPR for personal representatives, so a gain can arise even on the family home.

For trustee duties and filing steps see the official guidance on trustees’ tax responsibilities and read about property tax after inheritance on our page covering inheritance tax and capital gains tax on inherited property.

Conclusion

Final practical note: As you work through the administration, treat the estate as a separate taxpayer for any income or gains that arise after the date of death and before final distribution.

Key message: estates can owe Income Tax and CGT during the administration period — and these are entirely separate from the deceased’s final personal tax return and the Inheritance Tax position. Ignoring this is a quick route to penalties.

Remember the three registration triggers (estate value over £2.5m, disposals over £500k, or combined tax due over £10k), and the registration deadline of 5 October after the end of the relevant tax year. Act early to avoid pressure.

Practical steps we recommend: set up Government Gateway access as soon as you receive the Grant of Probate, keep asset details and income records up to date throughout, and appoint a tax agent or chartered accountant if the paperwork feels heavy or tax liabilities are likely to be significant.

If you don’t need to register for Self Assessment but some tax is due, HMRC allow you to deal with it by writing an informal letter setting out the Income Tax and CGT owed, the deceased’s name, last address, National Insurance number and (if they had one) their personal UTR, along with the personal representative’s contact details. To close down reporting when everything is settled, notify HMRC that the administration has ended and file the final SA900 return.

This is also a good moment to think ahead. If the estate includes property or significant assets that will pass to family members, consider whether a lifetime trust or will trust arrangement could protect those assets for the next generation — from care fees, divorce, or future IHT liabilities. Trusts are not just for the rich — they’re for the smart. Planning ahead, while there’s no urgency, is always easier and more effective than reacting to a crisis.

If property, significant assets or ongoing rental income are involved, treat the process like any other tax project — be methodical, start early, and stay calm. Plan, don’t panic.

Registration thresholds: when an estate must be formally registered with HMRC

One of the most common areas of uncertainty for personal representatives is working out whether an estate needs to be formally registered for Self Assessment at all. HMRC does not require every estate to go through the full Trust and Estates Self Assessment process, but the thresholds that determine this are easy to misread — and the consequences of getting it wrong can include late-filing penalties and unexpected interest charges.

The income and gains limits that matter

In most cases, an estate will need to be registered and a tax return submitted if the estate’s income exceeds £500 net in any tax year during the administration period. However, a separate threshold applies to gross income: where gross income from all sources exceeds £10,000 in a tax year, HMRC typically treats the estate as a complex estate regardless of the net figure. Both thresholds are relevant, and personal representatives should assess each year of the administration period independently rather than looking at the total across the whole period. HMRC’s guidance on estates in administration is set out in the HMRC Trust and Estate guidance pages and in the Trust, Settlement and Estate Manual at TSEM7000.

Where the estate is straightforward — for example, where income is modest and falls below both thresholds, and there are no capital gains — it may be possible to deal with HMRC informally without filing a full return. In our experience, personal representatives sometimes assume this informal route is available when it is not, particularly where rental income or interest from estate bank accounts pushes the figures above the net £500 threshold partway through a long administration.

When informal arrangements may suffice

An estate that produces only small amounts of savings interest, where the total income across the administration period is unlikely to reach £500 net, and where there are no reportable capital gains, will generally fall outside the formal Self Assessment requirement. HMRC may still need to be informed of income arising, but this can typically be done by correspondence rather than a full tax return. This is sometimes described as a simple or informal estate arrangement. Personal representatives should be cautious here: if income creeps above the threshold mid-administration, the obligation to register arises at that point and should not be deferred.

What personal representatives and agents should gather before registering

Where registration is required, gathering the right information before approaching HMRC will save time and reduce the risk of errors that can delay the process. The following are typically needed:

• The deceased’s full name, date of birth, date of death, and National Insurance number
• The deceased’s Unique Taxpayer Reference (UTR) if they previously filed Self Assessment returns
• Details of all sources of income arising in the estate from the date of death onwards, including interest, dividends, rental income and any business income
• Details of any assets disposed of during the administration period that may give rise to capital gains, including the date of completion and proceeds for any UK residential property sales
• The names and addresses of all personal representatives, and, where an agent is being appointed, the agent’s details and authorisation under form 64-8
• The relevant tax years for which returns will be required, noting that the obligation runs from the date of death to the date the estate is formally wound up

In our experience, delays most commonly arise where the deceased’s own tax affairs were not fully resolved before death, creating overlap between the deceased’s final return obligations and the estate’s own reporting requirements. These are legally distinct and should be tracked separately from the outset.

Common questions about HMRC, estates and tax obligations

What happens to HMRC when someone dies?

When a person dies, their personal tax record does not close automatically. HMRC will generally need to be notified of the death, typically through the Tell Us Once service, which informs multiple government departments in a single step. The deceased’s own tax affairs — including any outstanding Income Tax or capital gains from before the date of death — remain the responsibility of the estate and must be settled before the estate can be distributed. Separately, any income or gains arising within the estate after the date of death fall under a new tax identity: the estate itself, administered through Trust and Estates Self Assessment where the thresholds described above are met.

Do I need to apply to HMRC before probate?

In most cases, you do not need HMRC approval before applying for probate, but you may need to submit an Inheritance Tax return first. Where IHT is due or the estate exceeds certain value thresholds, you will generally need to obtain a receipt or clearance reference from HMRC’s IHT team before the probate registry will issue a grant. This is a distinct process from the Income Tax and CGT registration described in this article. For straightforward estates that fall below the IHT reporting thresholds, it may be possible to apply for probate using a simplified procedure, but personal representatives should confirm the applicable route with the HMRC and probate guidance on GOV.UK before proceeding.

Do you have to file an estate tax return if no tax is due?

Not necessarily — but the obligation to register and file is determined by whether the thresholds are met, not by whether tax is ultimately payable. If the estate’s income exceeds £500 net or £10,000 gross in a tax year, a return will typically be required even if reliefs, deductions or allowable expenses reduce the liability to nil. Filing a return in these circumstances protects the personal representative by creating a formal record and starting the clock on HMRC’s enquiry window. Failing to file when required, even where no tax is due, may result in automatic penalties.

Do I pay 18% or 28% CGT?

For disposals made on or after 30 October 2024, estates disposing of UK residential property are generally subject to CGT at 24%, which is the rate that replaced the previous 28% higher rate following the Autumn Budget 2024. The 18% rate may apply to gains that fall within any remaining basic-rate band available to the estate, though in practice the estate’s tax position will often mean the higher rate applies. Personal representatives should note that any CGT arising on a residential property disposal must be reported and paid within 60 days of the completion date using HMRC’s online Report and Pay Capital Gains Tax on UK Property service — this deadline runs from completion, not exchange, and missing it will typically trigger an automatic late-payment penalty and interest. This 60-day obligation runs alongside, and separately from, any annual Self Assessment return.

What is the 2-year rule for deceased estates?

The two-year rule most commonly referred to in estate planning relates to certain reliefs — for example, Business Relief and Agricultural Relief for IHT purposes, where the deceased must generally have owned qualifying assets for at least two years before death for the relief to apply. In the context of estate administration more broadly, a two-year period is also relevant to deeds of variation: beneficiaries have up to two years from the date of death to vary the distribution of an estate in a way that can be read back for IHT and CGT purposes. Neither rule is straightforward in application, and whether either is available in a specific estate will depend on the precise facts. Our team would always recommend taking advice from a suitably qualified professional — such as a solicitor or tax adviser regulated by a relevant professional body — before relying on either provision.