Rental income

[Riverbank]

Two years ago I was the sole beneficiary of a cottage and during probate put it on the market for £95K. Unfortunately it didn't sell. Instead of keeping the cottage empty I spent a few thousand pounds of my own money on renovations so it could be let out. Since Christmas it's been let via an agent and gives me an income of £400 a month. Technically the cottage is still part of the estate. The deeds are still in my deceased relative's name but the rental profit comes direct to me. Is this okay? If so, how long can the cottage remain part of the estate? Do I need to put the rental income on my income tax return? My intention is to sell it in a year or so when hopefully the market in the area picks up.

[pawncob]

Why have the Execs allowed this to happen? The property and the income belong to the estate until such time as it's distributed.
Yes, you must include it on your return (if and when the income comes your way legally).
Are there other beneficiaries? Have they instigated action against you or the Execs? Take legal advice.

[Riverbank]

Thanks for the response. I'm the sole executor and sole beneficiary of the estate. How is it illegal that the rental income comes to me?

[pawncob]

If you're the Exec,why haven't you finalised the estate?
It's the legal niceties that bite you twenty years down the road.

[Riverbank]

Because the probate solicitor said I didn't have to until the cottage was sold and then I couldn't sell the cottage. Is there a deadline?

[maths]

The issue is whether the administration period has terminated or not or to put it another way has the residue been ascertained.

If the estate consists of the cottage plus maybe monies in a bank account and you have paid off all debts of the estate arguable residue has been ascertained.
This means that the beneficial interest in the cottage has passed to you as sole beneficiary even if legal title still has not yet been transferred to you.

This means that rental income is yours and any gain on sale is yours not that of the estate,

[Riverbank]

Thank you for responding. After debts were cleared and funeral/solicitor fees paid there was no money left. Only the cottage and possessions that were left to me. Everything is concluded except changing the title deeds.

Even though the cottage is still part of the estate and in my relative’s name, as the rental profit is coming into my bank account from the managing agent, I assume I have to declare the income on my tax return?