Selling an Inherited Property
Selling an inherited property – or a share in it – can come at an emotional time. Often, inheriting a property happens straight after the loss of a loved one, adding extra strain to a difficult period.
While owning an additional property may bring financial benefits, there is a lot to consider. Especially when compared to managing a house that you already own, which is your main residence. Given everyone’s busy lifestyles, owning and maintaining two (or more) properties won’t suit many people. Particularly if you inherit a relative’s house which is in another part of the UK.
There is the emotional impact of dealing with the loss of a relative – perhaps a parent. And there is paperwork, the legal responsibility and financial matters to consider when inheriting an additional property.
It’s not unusual for properties left to people that inherit them to be poor condition, adding to a stressful situation.
What is probate? Do I need to apply for it?
Before we talk about your sale in detail, let’s look at the legal side of things.
Firstly, before you can sell it, you need to establish your legal relationship with the property itself. Is the property your parents’ old house, for instance, or another property that belonged to a relative? Are you named in their will?
Legally, before you can sell an inherited property, you need to establish these things and you may well be required to apply for probate. This is the process giving official recognition to a will after someone dies, by which someone applies for the right to deal with someone’s estate (such as their property, possessions and money).
The situation is much simpler if you are a beneficiary in a will. This is someone handed a share of the estate by the person who directly inherits it.
Not everyone will need to go through the probate process, but it is worth seeking legal advice if you inherit a property or a share in one.
The UK Government has published a guide to wills, probate and inheritance. You may not need probate if the person that died:
- Had jointly-owned land, property, shares or money, as these will automatically pass to the surviving owners, or if
- they only had savings or premium bonds
You will need to get in touch with each asset holder, such as a bank or mortgage company, to find out if you need probate to access their assets. Different rules apply to each organisation. This is particularly important when it comes to selling an inherited property or house.
Is there a will?
The first thing to do is check if the person who died left a will. The probate process varies depending on whether there is a will or not.
Are you are named in the will as someone who can deal with the person’s estate (known as ‘an executor’)? Then you can apply for a grant of probate from the Probate Registry.
If there is more than one executor, see the advice on the probate application form and guidance notes. The executors must estimate the value of the deceased person’s estate (including any inherited property) to calculate the tax owed.
The UK Government provides a guide to doing this as part of the probate process. While you can do an estimation of an estate’s value yourself, the probate process can be complex.
Seek expert advice to sell inherited property
For this reason, we advise you to seek expert legal advice by contacting a solicitor. A good lawyer should help guide you through the process and may save you time and effort.
Once the estate has been valued, this sum needs to be reported to HMRC. The taxation service provides a phone helpline to answer questions on probate and Inheritance Tax following a death. It can be accessed using this link.
Otherwise, you can use at HMRC’s online calculator to work out how much Capital Gains Tax you owe.
In some circumstances, the estate won’t have to pay tax. These can be where the estate:
- all passes to the dead person’s spouse or civil partner, a charity or a community amateur sports club or
- has a value below the Inheritance Tax threshold of £325,000
Consult your tax expert or HMRC to work out your family’s own circumstances – remember, these can vary widely. You will want to be sure you have got this right before deciding to sell an inherited property.
Selling your inherited property
Let’s say you’ve dealt with the probate process, paid any tax owed and sorted all the paperwork. So now you own the inherited property – or your share of it.
The extra house or flat means you must keep on top of any outstanding mortgage payments and utility bills. On top of that, your extra property must always be insured and maintained.
This could be a headache, considering that you are already probably responsible for one main property.
While the additional home could be let out, becoming a landlord means you are responsible for the upkeep, and insurance. It isn’t tax free, either.
As we said before, the inherited property may be miles away from where you live, and your children attend school. So, becoming a landlord can be an additional hassle to be best avoided.
Leaving the inherited house or flat unoccupied means the condition of the property is only likely to get worse. Yes, you could refurbish your new property. But do you have time, money and energy for what could be a lengthy and expensive project?
Choosing the right property buying service
Consider selling the property on quickly without the heartache. While you may have an emotional attachment to the inherited property, a clean break could help you move on.
An easier solution is for a reputable home buying company to arrange to sell your inherited house or flat quickly. Look for a company that has a proven reputation for buying homes in any condition throughout England.
They should provide a genuine, speedy route to sell an inherited property without headaches. Your chosen company should be accredited members of national industry bodies such as the PRS – Property Redress Scheme.
Questions to ask house buying companies
Do they adhere to Trading Standards’ Quick House Sale framework as well? Not all companies in the marketplace will meet these standards.
As you make your choice, look at whether a property company can offer you the following benefits:
- Do they have access to a substantial cash fund? This ensures the company can buy your house within just 28 days – or within a timescale that suits you
- Will they keep things simple? You have enough to deal with following the recent passing of a loved one. Will paperwork be kept to a minimum? And is their buying and selling process transparent?
- Will the property company charge fees at any stage of the sales process? Would they cover any of your legal fees?
- Lastly, would the company help you sell your inherited property in any condition? And does it buy property in many locations including Nottingham, Manchester, Leeds, London, Birmingham and in Wales?
So, while there are plenty of companies to help sell an inherited property, we recommend you consider your decision carefully.
Selling an inherited property means more to people than just bricks and mortar. Aside from its financial value, someone’s old family home – or one owned by relatives – can spark strong emotions. But leaving these feelings aside, we believe sellers always deserve clear, straightforward communication throughout their dealings with a property company.
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