Inheritance tax is assessed on the estate when someone dies, and is normally paid by the estate before you receive anything, not by you personally. Capital gains tax is different: it can apply to you only if you later sell the inherited property for more than it was worth at the date of death.
If you sell for more than the probate value, the increase is a gain, and capital gains tax may be due on the part of the gain above your annual allowance. Because an inherited house is usually not the home you live in, the relief that protects your own main residence generally does not apply.
Get an accurate probate valuation, because it sets the base figure your gain is measured from. Keep records of selling costs and any qualifying improvements. And remember that the longer you hold the property while its value rises, the larger the potential gain becomes.
Sell close to the probate value, soon after inheriting, and there is often little or no gain to tax.
This is general information and not legal, tax or financial advice. Every estate and situation is different, so check with the estate's solicitor or a qualified professional before making decisions.
You are generally not taxed just for inheriting. Inheritance tax, if any, is usually settled by the estate. Capital gains tax may apply only if you later sell for more than the value at the date of death.
Broadly, the sale price minus the probate value, minus selling costs and your annual allowance. The rate depends on your income. Allowances and rates change, so check gov.uk or an accountant for current figures.
Selling close to the probate value, soon after inheriting, often leaves little or no gain to tax. An accurate probate valuation and good records of costs also help.
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