Rental income during probate: who gets it and how it's taxed

Published 22 October 2026 · Updated 22 October 2026

Rental income during probate belongs to the estate, not to the people who will inherit, and the personal representatives must pay Income Tax on the full amount the estate receives from the day after the death until everything has been distributed [1]. Estates don't get personal allowances, and for income other than dividends they pay tax at 20% [1].

The executor or administrator collects the rent, pays the property's running costs, and keeps records. If the estate's total income in a tax year is £500 or less, it doesn't need to be reported; above that, all of it is reported [2]. Simple estates (under £2.5 million, under £10,000 of tax, no more than £500,000 of sales in a tax year) can report by letter to HMRC at the end; others must register the estate and file an SA900 return [2]. When the estate is distributed, beneficiaries get an R185 showing the income and tax [3][4].

General information only, not tax or legal advice.

Who controls the rent between death and distribution

The personal representative is "legally responsible" for the estate's assets from the date of death until everything is passed on, the administration period [1]. During it they "may have to pay Income Tax on things like rental income from property" [1].

Before probate is granted, the executor's power to deal with assets is limited in practice, because banks and others won't release money without the grant [5]. But collecting rent that the tenant is already paying, and keeping the property safe, are part of looking after the estate.

Practical set-up

Open an account for the estate. GOV.UK mentions an "executorship account" when several people deal with the estate [1].
Write to the tenants with the new payment details and an address for notices. Rent may be treated as not due until the tenant has one [6].
Stop or redirect standing orders for the property's bills through the bank [7].
Keep a rent ledger from the day after the death, separately from rent received before death (which is the deceased's own income for their final tax return) [8].

Rental income during probate: how much tax

Income received	Treatment
Rent up to the date of death	The deceased's income, in their final Self Assessment return if needed [8]
Rent from the day after the death	Estate income, taxed at 20% (non-dividend income) [1]
Estate total income £500 or less in a tax year (from 6 April 2024)	No need to report [2]
Estate total income over £500	Report all of it; can't deduct the £500 [2]
Dividends from 6 April 2026	10.75% [1]

The estate is taxed on its rental profit: rent less allowable expenses. Mortgage interest on residential property doesn't come off as an expense for individuals; see our section 24 guide and talk to the estate's accountant about how finance costs are treated in an estate.

Reporting the estate's income to HMRC

Simple estates: informal arrangements

You can report by letter at the end of the administration period if all of these apply [2]:

the estate was worth less than £2.5 million at death,
total Income Tax and Capital Gains Tax due is less than £10,000,
you didn't sell more than £500,000 of assets in any single tax year.

The letter goes to HMRC Bereavement Services, BX9 2BS, with a year-by-year breakdown of income and gains and your details [2].

Complex estates: register and file SA900

Otherwise, register the estate online and file a Trust and Estate Tax Return (SA900) [2]. Key dates [2]:

Task	Deadline
Register the estate	5 October after the tax year
Paper SA900	31 October after the tax year
Online SA900 (via compatible software)	31 January after the tax year
Pay tax	31 January after the tax year

You need a separate Government Gateway user ID, set up as an "Organisation", for each estate [2]. HMRC sends a UTR for the estate within 15 working days [2].

Worked example

Sam is executor of his father's estate, which includes two let flats. His father died on 10 August 2025. The estate is worth £900,000; there's no sale in the period.

Tax year	Gross rent received by estate	Allowable expenses	Profit
2025 to 2026 (11 Aug to 5 Apr)	£14,200	£2,900	£11,300
2026 to 2027 (to distribution, 30 Nov 2026)	£11,800	£1,600	£10,200

The estate's income is well over £500 in both years, so it must be reported [2]. The estate is under £2.5 million and if the tax due is under £10,000 and sales stay under £500,000 a year, Sam can use informal arrangements and write to HMRC at the end [2]. At 20%, the tax is roughly £2,260 and £2,040 before any further adjustments for finance costs [1].

Can you rent out a property while going through probate?

If the house was empty when the person died, the executor may want to let it to cover costs. Things to weigh:

Authority. GOV.UK says not to "make any financial plans or put property on the market" until you have probate [5]. Letting a property is a significant step with a long-lasting tenancy, given the new rules.
Beneficiaries. If the beneficiaries want to sell, a new tenancy can make that harder: since 1 May 2026, the selling ground can't be used in the first 12 months and needs four months' notice [9].
Compliance. The executor becomes the landlord, with all the gas, electrical, EPC and deposit duties [10].
Insurance and mortgage. Get the lender's and insurer's agreement first; GOV.UK says anyone with a mortgage must get the lender's permission to let [10].

Many executors leave an empty house unlet until probate and decisions are made. See our executor guide.

The R185: what beneficiaries receive

When income is paid to a beneficiary, the personal representative gives them a statement of income from estates (R185) [3]. It shows the income and tax already paid between the date of death and when it was passed on, and you need it for your own Self Assessment or to claim a repayment [4].

How Gaffy helps an executor

A rent ledger, the tenancy, receipts and certificates all need to be in one place when the estate's accountant asks. Gaffy gives you a vault for the documents, reminders for gas, EICR and EPC dates, and a repair link for the tenant so issues are logged with dates. £12 a month for up to 5 properties, plus £4 per extra, first month free, and we'll set your properties up for you.

What the estate can typically deduct from the rent

The estate pays tax on its rental profit, so keep receipts for the costs of running the let. GOV.UK's list of allowable expenses for residential lets includes [11]:

letting agents' fees,
accountants' fees,
buildings and contents insurance,
maintenance and repairs (but not improvements),
utility bills, ground rent and service charges, where the landlord pays them,
Council Tax, where the landlord pays it,
services such as cleaning or gardening,
other direct costs, like advertising and stationery.

Capital spending, such as renovating beyond repairs for wear and tear, isn't an allowable expense [11].

Rent that was owed when the person died

Arrears at the date of death are different from rent received afterwards. Money owed to the person who died is an asset of the estate for Inheritance Tax; GOV.UK's list of assets includes "money they're owed" [7]. Rent for periods after the death is the estate's income [1]. Split the ledger at the date of death so the accountant can treat each correctly. If a tenant had paid rent in advance, the period after death is still the estate's.

When the administration period ends

Income tax for the estate stops at the end of the administration period, when everything has been passed on [1]. From the date the property is transferred, rent belongs to the new owner and goes on their own return. Agree the transfer date with the executor in writing so that the rent for the month of transfer is split correctly.

Key numbers for executors

Figure	What it is	Source
20%	Estate's Income Tax rate on rent	[1]
£500	Estate income per tax year below which no report is needed	[2]
£2.5 million	Estate value limit for informal arrangements	[2]
£10,000	Total tax limit for informal arrangements	[2]
15 working days	Time for HMRC to send the estate's UTR	[2]

FAQ

Does the estate get the £1,000 property allowance?

GOV.UK says estates "do not get any allowances on savings, income or dividends" [1].

What about the deceased's last tax return?

Fill in a Self Assessment return for income they earned before they died, if needed [8].

Can the estate claim repairs?

The estate is taxed on its profit. Ask the estate's accountant which costs count.

Try Gaffy free for a month · Inherited property hub · Executor renting property · Inherited property tax return · Inheritance Tax on rental property

Sources

GOV.UK, Dealing with the estate of someone who's died: managing and selling assets: https://www.gov.uk/probate-estate/managing-and-selling-assets
GOV.UK, Dealing with the estate: reporting an estate's income to HMRC: https://www.gov.uk/probate-estate/reporting-the-estate
GOV.UK, Dealing with the estate: distributing the estate: https://www.gov.uk/probate-estate/distribute-the-estate
GOV.UK, Tax on property, money and shares you inherit: https://www.gov.uk/tax-property-money-shares-you-inherit
GOV.UK, Applying for probate: https://www.gov.uk/applying-for-probate
Landlord and Tenant Act 1987, section 48: https://www.legislation.gov.uk/ukpga/1987/31/section/48
GOV.UK, How to value an estate for Inheritance Tax: identify assets and debts: https://www.gov.uk/valuing-estate-of-someone-who-died
GOV.UK, Dealing with the estate: settling debts and taxes: https://www.gov.uk/probate-estate/settling-debts-and-taxes
GOV.UK, Grounds for possession: guidance for landlords and letting agents: https://www.gov.uk/government/publications/grounds-for-possession-guidance-for-landlords-and-letting-agents/grounds-for-possession-guidance-for-landlords-and-letting-agents
GOV.UK, Renting out your property: landlord responsibilities: https://www.gov.uk/renting-out-a-property/landlord-responsibilities
GOV.UK, Renting out your property: paying tax: https://www.gov.uk/renting-out-a-property/paying-tax