Inherited Property CGT Calculator — The Honest 2026/27 Numbers

When someone dies, their property is "rebased" to its market value at the date of death — the probate value. This means any increase in value that happened during the deceased's lifetime, sometimes across many decades, is wiped out entirely for CGT purposes. As the beneficiary, your base cost is the probate value, not whatever the deceased originally paid.

This is precisely why running the numbers through a proper inherited property CGT calculator matters before assuming you face a large tax bill. Someone who inherits a childhood home their parents bought in the 1970s for a few thousand pounds often assumes, understandably, that they're about to face CGT on the entire increase in value since then. In reality, the tax clock effectively resets at the date of death, and only the movement in value from that point to the eventual sale is taxable.

The legal mechanism behind this is set out in Section 62(1) of the Taxation of Chargeable Gains Act 1992, which treats the estate as having acquired the asset at its market value on the date of death, rather than tracking the deceased's own original acquisition cost forward. No CGT is charged on death itself — it only arises later, if and when the beneficiary sells for more than that probate value.

In practice, this means if you inherit a property valued at £350,000 at probate and sell it 18 months later for £360,000, your taxable gain is just £10,000 — not the full increase in value since the deceased bought it, which could easily be hundreds of thousands of pounds more.

Because the probate value becomes your CGT base cost, getting that figure right at the outset genuinely matters for two entirely separate taxes at once. An inherited property CGT calculator is only as accurate as the probate value fed into it, and that figure also directly determines the estate's Inheritance Tax liability — a genuine tension worth understanding.

A lower probate valuation reduces the immediate Inheritance Tax bill, since IHT is charged on the estate's value at death. But it also lowers your CGT base cost as the beneficiary, meaning a larger taxable gain if the property is later sold for more. A professional RICS surveyor valuation, or two or three estate agent valuations averaged together, is genuinely worth obtaining and keeping on file — both to support the IHT return at the time, and to defend the CGT base cost years later if HMRC ever queries it. If the property was undervalued for probate, HMRC's Valuation Office Agency can challenge the figure, which can unwind both the IHT position and the CGT calculation together.

These rates replaced the previous 28% higher rate that applied before October 2024. The annual exempt amount is £3,000 per person for 2026/27 — every individual beneficiary gets their own allowance against their share of the gain, a detail this inherited property CGT calculator applies automatically to your figures.

The line between a deductible capital improvement and a non-deductible repair genuinely trips people up, and it's worth being precise about the distinction. Replacing a leaking roof like-for-like is a repair, restoring the property to its previous condition, and isn't deductible. Adding a loft conversion, extending the property, or replacing a basic kitchen with a genuinely higher-specification one goes beyond restoration and counts as a capital improvement, reducing your taxable gain. Simply repainting, replacing worn carpets, or general maintenance and upkeep, however necessary, falls on the wrong side of that line for CGT purposes, even though it may well have made the property easier to sell.

Keeping genuine, dated invoices for any improvement work is worth doing from the outset, rather than trying to reconstruct costs from memory once a sale completes years later. HMRC can request evidence for any deduction claimed, and a missing receipt for a genuine £15,000 extension is a real, avoidable cost if the claim can't be properly substantiated.

If the deceased lived in the property as their main home, but you never live there yourself, their relief does not automatically transfer to you. However, the executor can claim relief covering the deceased's full residence period plus a further 36 months after death, regardless of whether anyone lives there — meaning a sale within 3 years of death, where it was the deceased's main home throughout, often results in no CGT liability for the estate.

If you personally move in and use it as your own main home, you build up your own Private Residence Relief for the period you actually live there. The final 9 months of ownership always count as a period of residence, even after you've moved out, which can shelter part of a later gain even if you didn't live there right up to completion.

It's worth being realistic about the trade-off this involves. Moving into an inherited property purely to secure Private Residence Relief means genuinely relocating your life — your main residence for tax purposes needs to reflect where you actually live, not simply where you're registered on paper. HMRC can and does challenge claimed periods of residence that don't line up with council tax records, utility bills, and other evidence of where someone genuinely lived, so this isn't a relief to claim casually if the move isn't real.

Where the property was only partly the deceased's main home, or where you lived there for only part of your ownership before selling, the relief is apportioned on a time basis — a genuinely more complex calculation than this simplified tool models, and one worth confirming with an accountant if your situation involves partial residence, a period of letting the property out, or shared use with other family members.

Where a property is inherited by multiple beneficiaries, each person's share of the gain is calculated separately, and each individual has their own £3,000 annual exempt amount to set against their portion. Two siblings splitting a £40,000 gain equally, for instance, each face a £20,000 gain, reduced by their own £3,000 allowance before tax applies — genuinely different from treating the full gain as a single taxable amount. Running each sibling's figures through an inherited property CGT calculator separately, rather than assuming an even split of one combined tax bill, gives a genuinely accurate picture for each person.

Any CGT owed on a UK residential property sale must be reported and paid within 60 days of completion, via HMRC's UK Property Reporting Service — separate from your normal Self Assessment return. Late filing incurs automatic penalties, so this deadline genuinely needs treating as fixed, not flexible, however busy the period around a property sale inevitably is.

This is precisely why running your numbers through an inherited property CGT calculator before completion, rather than afterward, is genuinely worth doing. Knowing roughly what you'll owe ahead of time means the 60-day window becomes a straightforward administrative task — gather the figures, file the return, pay the tax — rather than a scramble to work out a liability you hadn't previously considered, on top of everything else a property sale and an estate already involve.

If the sale price is close to the probate value, or if Private Residence Relief is expected to cover the full gain, the reporting obligation can still apply even where no tax is ultimately due, depending on the specific circumstances — it's worth checking whether a report is required in every case, rather than assuming a nil liability means nothing needs to be filed.

You inherit a property with a probate value of £320,000. Three years later, you sell it for £395,000, having paid a solicitor £2,000 and an estate agent 1.5% (£5,925). Raw gain: £395,000 − £320,000 = £75,000. After deducting £7,925 in costs and the £3,000 annual allowance: taxable gain of £64,075. As a higher-rate taxpayer at 24%: £15,378 in CGT.

Had you moved into the property as your main home for the full three years instead, Private Residence Relief would have reduced this to £0 — the entire ownership period would have qualified as a period of residence.

Now consider a variation where two siblings inherit the same property jointly, each with a 50% share. The raw gain of £75,000 splits to £37,500 each. After each sibling's own £3,000 annual allowance and their share of the £7,925 costs (£3,962.50 each), each faces a taxable gain of roughly £30,537. If one sibling is a basic-rate taxpayer and the other higher-rate, they'd pay genuinely different amounts of tax on identical shares of the same gain — £5,497 at 18% versus £7,329 at 24% — illustrating why each beneficiary's own tax position matters, not just the total gain on the property.

Official sources & further reading: check current rates at GOV.UK, report a sale via the UK Property Reporting Service, and confirm your position with a qualified tax adviser. Check the estate's Inheritance Tax position with our inheritance tax calculator, or the probate process cost with our probate cost calculator.