A Brief Guide to Selling Inherited Property
One good reason to sell a house in a hurry relates to the inheritance of property. If you’re not going to be living in the home, you’ll probably want to sell it as quickly as possible. But that can cause some emotional heartache along the way.
Selling an inherited property entails a few formalities to negotiate carefully and sensitively. Here are a few tips and snippets of advice to get you started.
Establish your relationship with the property
Inheriting a house doesn’t give you the automatic right to sell it. Even if you’are the person named who will receive the house in a will, you must apply for probate before you can sell it on legally. However, if you’re handed a share of the estate as a direct beneficiary, the process could be a lot simpler.
What is probate?
Applying for probate gives you the right to deal with the deceased’s estate. If you are an executor of the will, you can request a grant of probate from the probate registry giving you the authority to deal with the estate, access bank accounts and share money between named beneficiaries. If a will wasn’t left, however, a close friend or relative can apply.
You don’t need probate if:
- You have a joint bank account with the deceased
- The value of the estate is less than £5,000
- You and the deceased jointly owned the inherited property
If you are a beneficiary of the deceased’s estate, property and assets are sold, and the proceeds shared amongst all of the legal beneficiaries.
Paying inheritance tax when selling an inherited house
The chances are you will need to pay inheritance tax if you’re receiving a large sum. If you’re selling an inherited house to pay the tax, you will need to apply for probate at the earliest opportunity. Do not wait for probate to list the house for sale, but it will require granting before a transaction completes. If you plan on keeping the home to live in or rent out, you might be able to pay the inheritance tax in instalments.
NOTE: If you have a share in the property and sell it, inheritance tax will need to be paid on the total sale price before any proceeds can be shared out.
If you’re a legal beneficiary you won’t be taxed — only the estate of the deceased taxed. However, you may have to wait for your inheritance, as debts and various fees will need paying and settled first.
How much tax is payable?
There is no inheritance tax payable on an estate worth less than the current amount set by HMRC — a solicitor will let you know the current tax threshold well in advance. The executor or administrator of the will needs to pay any tax owing. The full amount is payable six months after the person has died — although extensions can be agreed on a case by case basis. The rate at which tax paid changes, but it doesn’t usually stray too far from the 40% mark. You can reduce this percentage by donating at least 10% of the estate to charity. You will need to pay capital gains tax on any profit you make from the sale of inherited assets.
Don’t forget utilities
Inherited property often comes with a myriad of issues to resolve before it can be sold. For instance, you may need to use funds from the estate to clear final gas, water and electricity bills. You should also check that there is no outstanding council tax bill. And the chances are the house will be empty for a period if you’re selling it, so make sure you have empty house insurance.
Selling inherited property
You can sell inherited property once you pay all of the taxes and comply with all the legal procedures. Just be aware that the probate process must complete before a sale can go through.
Inheriting property is a bittersweet time for anyone. Yes, it’s always nice to receive a windfall, but it comes at a time when you’re dealing with the loss of a loved one. Whether you’re the sole beneficiary or you’re sharing the proceeds of the house sale, you may want to get the process over and down with as soon as possible.
How to sell inherited property quickly
Especially if you have tax and fees to pay, the faster you can sell up, the faster you can get everything settled and start coming to terms with your loss. A growing number of people are choosing to sell directly to ‘fast house buyers’, as they can often complete the purchase of property within just a few weeks. There are several advantages associated with this course of action:
- No need for marketing
- No need for property viewings
- Bypass price negotiations
- Conveyancing is simple
- No property chain
- A guaranteed sale price
- Receive the proceeds in as few as two weeks
While you may receive slightly more for the property by selling it on the open market, you will have to prepare yourself for delays and complications — the last thing you’ll want to settle and distribute an estate.
By taking a shortcut and selling inherited property directly to a reputable company such as Flying Homes, you can get the certainty and protection you’re looking for at a traumatic time in your life.