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.
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