Losing a parent or relative can be an emotional experience. With so much to organise, you might find yourself feeling overwhelmed. So, dealing with the impact of inheriting a property on top, may feel like an extra burden.
Over a third of us can expect to inherit property as some point in our lives—that’s around 18 million people in the UK.
Yet, even though inheriting property may seem like a gift, it’s more often not the case. In fact, over two-thirds of people in the UK don’t want their inherited properties and would prefer to sell.
But, selling a probate property can be complicated. So, before you rush into making any decisions, it’s important you understand what happens when you inherit a property and what your options are.
Here’s a quick rundown about everything you need to know when you inherit property.
What happens when you inherit a property?
When you inherit a house or flat you are required to follow a legal process. In practical terms, this means the executor of the will applies for probate.
Probate is the legal process where the court of law ‘proves’ a will. Which means, they give permission for the wishes of the will be carried out.
Once probate is granted, the executor of the will is able to do the following:
- Assess the assets of the deceased
- Notify relevant institutions of the person’s death like banks, building societies, council and HMRC.
- Calculate and settle accounts, liabilities and debts
- Pay any owed inheritance tax
- Distribute what remains of the estate according to the instructions of the will
- Transfer the property to the beneficiary and formally request the change with the Land Registry.
What’s the deal with Inheritance Tax?
For starters, be prepared that this will probably be the biggest tax liability you’ll ever face. And, Inheritance Tax can get complicated. But how much you owe will depend on a variety of factors.
- Have you been left just a property or the whole estate?
- If the property is worth more than the current inheritance tax nil-rate band then you may be forced to sell the property to pay the tax.
- Do you have to pay Capital Gains tax? This depends whether the property you’ve inherited has increased in value whilst you’ve owned it.
How to decide what to do with your inherited property
Once ownership of the property is transferred to you, you are faced with a few choices—do you live in it, sell it or rent it out?
What you decide also depends on your individual situation. For instance, you might want to sell your inherited home to help you buy your own property of choice. Or you might fancy being a landlord and renting it out. But be warned, there’s lots of responsibility in managing property. Don’t forget to calculate how much tax you’ll then owe. So be sure to check out all the details beforehand.
Or maybe, you’ve got a shared inheritance, which means you share the property with other members of the family. This situation means you have to all agree how to manage the property. This may require some negotiation depending on what each beneficiary wants. One person might want to live in the property, while another would prefer to sell it.
Lastly, if you’re inheriting a family home, or somewhere that has special memories for you, it may be harder to decide what to do or to let go.
Need help selling a probate property fast
Whether you need a quick sale for financial reasons like paying the tax bill, or it’s for emotional reasons, don’t worry.
House Buy Fast will buy your property for cash regardless of condition. And, their expert knowledge of the probate process means they can support you throughout all aspects of the sale.