Sometimes in life, we have to make difficult decisions. Deciding what to do with an inherited property is one of these.
It is hard enough to decide whether you should keep the property for yourself, rent it out, or sell it, let alone proceed with one of these options.
So, if you find yourself wanting to sell a property that has been left to your name, what should you do? This article will tell you exactly that.
Some useful legal definitions:
If you are reading this article, chances are you are an executor of a will. For anyone who doesn’t know what this is, an executor is a person named in a will to deal with a deceased person's estate.
If you are a named executor, you must get in touch with HMRC and request a grant of probate. What does this mean, exactly? It can be a little confusing, so we will try to break it down.
Probate is the process of confirming whether a will is valid. A grant of probate, on the other hand, is a legal document that allows you to access bank accounts and deal with other financial matters on behalf of the deceased. Sometimes these terms are used interchangeably.
As of January 2024, a grant of probate costs £273 if the total value of the estate is over £5,000. If the value of the estate falls under £5,000, there is no cost to get a grant of probate.
So, now we have got the legal definitions out of the way, let’s get stuck in.
Step one: Read over the will
The will is the backbone of this process. Without it, it is hard to move on to the next step, so if possible, you must first locate it and read over it carefully. This is because the will contains the wishes of the deceased individual, including their wishes relating to the future of the property.
But what if you can’t find the will?
There are two different routes you can take depending on the situation.
If a will was never written, you can still apply to become the administrator of the estate. To do this, you must be the closest living relative of the deceased person.
If a will was written but you can’t find it, you could consult the deceased person’s solicitor, or even their bank or building society.
Step two: Apply for probate (if you need it)
In most cases, you will need to apply for a grant of probate. However, in some cases, for example, when the value of the estate is less than £5,000 or if the deceased person’s estate was jointly owned, no probate is needed. You can head to https://www.gov.uk/applying-for-probate/apply-for-probate for more legal information.
Step three: Pay inheritance tax
Inheritance tax depends on the value of the property and changes over time. As of January 2024, the standard Inheritance Tax rate is 40%.
However, don’t panic! This does not mean that you will lose 40% of the estate value to taxes. There is something called a tax-free threshold. The standard value for this is £325,000; in this case, you would only have to pay 40% tax on anything over the £325,000.
For example, if the estate was worth £400,000 and your tax-free threshold was £325,000, you would only pay inheritance tax on £75,000 (£400,000 minus £325,000).
This figure does vary from situation to situation though, so it’s worth reading up on it here if you have any questions.
Step four: Tidy!
The next step is to tidy the property and make sure it is free of clutter. A clean, tidy space will ensure that the property is much more appealing to customers! It is also best to do this before getting the property valued, to give it the best chance.
You don’t need to have the property professionally cleaned at this stage unless you want to. A bit of dusting, wiping down surfaces, and hoovering can go a long way!
You might be wondering if you should decorate the property.
This is entirely up to you. While we understand that clearing out and redecorating your loved one’s home is emotionally difficult, the truth is that most inherited properties will be more attractive to buyers once they have been decorated.
This doesn’t have to be a huge project. If you want to sell the property quickly, a fresh coat of paint or some new curtains can make a world of difference. It is best to decorate in neutral colours, as these will appeal to the majority of people.
However, remember that if you are looking to sell the property to an investor, it may be best to keep the property as it is. Investors are always looking to flip properties so that they can make a profit.
Step five: Get the property valued
It is always beneficial to get a valuation from at least one estate agent to help you gauge the value of the property. Not only will it give you a benchmark to aim for, but we may suggest things you could do to boost the value of the property. You can always call us for a chat on 01535666031 for any advice.
Step six: Sell the property
So, it’s time to sell! It can be really difficult to decide which selling route to go with, as there are numerous.
Your three options are:
- Sell through an estate agent.
- Sell to a house-buying company.
- Sell via auction.
The option you choose should depend on what your priorities are. In a nutshell:
Traditional estate agent – this is likely the best option if you want to get the best price possible and you are not afraid to compromise on time. It can take a while for the sale to be completed, but you can rest assured that you are getting top dollar for your property.
House-buying company - this is the best option if you want to shift the property as quickly as possible. However, you would be compromising on the price. In the current market, you would be looking at a 17-22% loss in profit.
Auction – this option offers an in-between approach compared to the other two. You can usually expect to sell your property for roughly 90% of its market value at auction. The process can also be very fast. Once the property is sold, completion usually happens within a month. The main drawback is that there is no guarantee that you will get a sale, and it can take months to find someone willing to bid on your property.
Step seven: Pay Capital Gains Tax (CGT)
What is CGT? It is a type of tax that you have to pay if the value of your property increases between the point at which it is valued for Inheritance Tax purposes up until the property was sold. CGT is taken from any profit made.
You can find out more about CGT here.
And that’s it! We hope you have found this article useful, and we wish you the best of luck with selling your inherited property.
As we have mentioned we are here to help in any way we can.
Sourced from
co-oplegalservices
gov.uk
homesellingexpert
