When a Landlord dies, families are often unsure what happens next — especially if the property is rented out.
A very common question is:
“Does the rental income stop when someone dies?”
The short answer is no.
Rent often continues — but the Tax treatment changes.
This guide explains what happens to rental income after death, who is responsible for reporting it, and what HMRC expect during the administration of the Estate.
🎥 This video explains what happens to rental income after death and who is responsible for reporting it to HMRC. Video will be live on 28 December
The full written guide continues below.
1. Does Rental Income Stop When a Landlord Dies?
No.
If a property was rented out before death:
- Tenants usually remain in place
- Rent continues to be paid
- The tenancy does not automatically end
What changes is Who receives the income and How it is taxed.
2. Who Is Entitled to the Rental Income After Death?
From the date of death until the Estate is settled:
- Rental income belongs to the Estate, not the beneficiaries
- The Executor or Administrator is responsible for managing it
- The income must be recorded and reported correctly
Beneficiaries only become entitled to the income once the property is transferred to them.
3. How Is Rental Income Taxed During Probate?
Rental income received after the date of death is taxed as Estate income.
This means:
- It does not go on the deceased person’s final Tax Return
- It may need to be reported on an Estate Tax Return
- Allowable expenses can still be claimed
- Losses can arise during the administration period
This is different from the deceased’s final Tax Return, which I explain in my guide on Final Tax Returns vs Estate Returns
4. What Expenses Can the Estate Claim?
The Estate can usually deduct normal rental expenses, including:
- Letting agent fees
- Repairs and maintenance
- Insurance
- Service charges
- Ground rent
- Safety certificates
- Accountant’s fees related to the rental accounts
These expenses are offset against the rental income received by the Estate.
5. What If the Rental Property Makes a Loss During Probate?
This happens frequently.
If allowable expenses exceed rental income:
- The Estate may make a rental loss
- That loss can usually be carried forward within the Estate
- Losses do not transfer to Beneficiaries personally
If expenses exceed rental income during probate, rental losses can arise, which I explain in more detail in my Rental Losses Explained – How They Work and How They’re Used
6. What Happens When the Property Is Transferred to Beneficiaries?
Once the property is transferred:
- The Beneficiaries become the Landlords
- Rental income from that point belongs to them
- They must report rental income personally
- Their rental profit or loss is calculated separately
- Their future Capital Gains Tax is based on the Probate Value, not the original purchase price
If the property is sold instead of transferred, the tax treatment is different.
I explain this in more detail in my guide, Selling an Inherited Property – CGT Explained
7. Does the Executor Need to File a Tax Return for the Estate?
Possibly.
An Estate may need to file a Tax Return if:
- It receives rental income
- It earns Interest or Dividends
- It sells assets during Probate
- HMRC request one
Smaller Estates may qualify for simplified reporting, but this should be confirmed with HMRC rather than assumed.
8. What Records Should Executors Keep?
Executors should keep clear records of:
- Rental income received after death
- Expenses paid
- Letting agent statements
- Bank statements
- Tenancy agreements
- Probate valuations
- Correspondence with HMRC
HMRC can ask to see records for several years after the Estate is settled.
9. Common Mistakes Executors Make
Some common issues include:
- Assuming rent stops automatically
- Paying rental income directly to Beneficiaries too early
- Forgetting to declare rental income during Probate
- Missing Estate Tax Return obligations
- Losing access to reliefs due to poor record keeping
These mistakes are usually unintentional — but they can cause problems later.
10. When Should Executors Seek Professional Help?
Support is often needed where:
- There is ongoing rental income
- There are multiple Beneficiaries
- The property is sold during Probate
- There are rental losses
- HMRC request information
- The Estate is complex
Getting advice early can prevent delays and HMRC issues later.
Final Word
Rental income doesn’t stop when a Landlord dies — but the way it’s taxed changes.
Executors are responsible for managing and reporting the income correctly until the Estate is settled.
Understanding this early helps avoid HMRC problems and ensures Beneficiaries receive what they’re entitled to.
If you need help reviewing rental income during Probate or understanding the Estate’s reporting obligations, you can get in touch and I’ll guide you through it calmly and clearly.