Income tax of beneficiary on deceased estate's property

[LAB48]

Situation

Person has died, leaving a house that is currently earning rental income

Estate has not yet been disbursed, income is going into solicitor as executors of Will

When do the beneficiaries have to declare this income in their own tax return if at all ?
How is tax paid by the Estate ?

If property continues to earn income into the Estate until it is sold, will the income and the tax due on the rental income be dealt with as part of the Estate ?

and will the beneficiaries have to report that income and when ? even if the tax has already been paid by the Estate ?

I am concerned that I will have an inflated income that I have to report, that in actual fact does not need to be reported, especially if the tax has already been paid on it by the Estate.
thanks

[maths]

I assume the property is left as a specific legacy to beneficiary B.

During the administration of the estate the executors are required to pay any income tax lability arising on estate income (eg rental income). Rate of 20%.

Relevant form is SA900.

Once the property is appropriated to B then B becomes liable to income tax on rental income going forward but also on rental income received by the executors during administration and paid over to B. B's entitlement is to all rental income from date of death and for income tax is treated as arising in the tax year it arose to the executors. B will receive an offsetting credit for income tax paid by the executors.

Executors will issue R185(Estate Income) to B.

[LAB48]

thank you

what does appropriated mean ? please.

If the property stays in the estate, earning income and then it is sold in the tax year of death, whilst still in the estate, does the estate declare the income and pay the tax ? or do the beneficiaries have to declare the rental income from that same period as part of their income even if the tax has been paid by the estate at 20% ?

does the form R185 ADD income to beneficiaries taxable income for the year ? even if no income has been paid over ?

thank you

[maths]

Appropriated refers to the time at which the executors transfer the property to the inheriting beneficiary.

The executors are not able to sell the property during the estate's administration unless they need to do so to pay the estate's administration expenses, IHT, etc. If they sell it for such purposes then any capital gain is that of the executors and any income tax on any rental income is also for the executors.

If however the executors do not need to sell the property to pay administration expenses then they will need to appropriate the property to the beneficiary who could then sell it.

Once the person entitled to the property receives it (ie it is appropriated to him) he is liable for income tax on the rental income from death, whether the income is paid over or not.
The R185 merely confirms to the beneficiary the income received by the executors and the income tax they have paid on it and which the beneficiary can offset against his own tax liability.