We buy any inherited property in any condition anywhere in England & Wales. We buy freehold or leasehold and offer a fair price as a prospective cash property buyer.
We are property experts; we can buy your inherited property even before probate has been granted, so you have peace of mind that your inherited property is sold.
We will give you the purchase price offer in writing, and we can exchange contracts within days and complete according to your timeline.
Hardly any prospective buyers have an in-house team of lawyers, surveyors, and ready cash funds. We have a wealth of experience in the legal sale process, and selling to us is made easy.
Can I sell a property before probate is granted?
We can exchange contracts before probate is granted and wait until you have been granted probate. This elevates considerable stress from going through estate agents while waiting several months for a property sale.
Often the problem is a property chain; if one party fails to secure a mortgage, your buyer may not have the funds to buy your property, so the deal fails, and you have to go back to marketing the property again.
With us, no fuss, no delay, no survey, no chain, and no waiting around for the buyer to obtain a mortgage. We are a cash house buyer.
Selling an inherited property can be an upsetting experience at the best of times. First, there is the emotional impact of losing a loved one. And then, there are the legal responsibilities, paperwork, and financial matters to consider.
Usually, inheriting a house will mean you have to carry out some research. These will be things like finding out if a Will has been left and the legal process on how to apply for probate. You will also need to research any inheritance tax liabilities and capital gains tax.
But do not despair – this ultimate guide has been written to put all the information you need at your fingertips.
Read on to understand the ins and outs of selling an inherited property today.
The cost of inheriting a property
Mortgage Lender & loans
Often when a property is inherited, loans and mortgages will have already been paid off during a lifetime of ownership. However, this is not always the case in every situation.
Occasionally a property is left with an outstanding mortgage or loan. This means the monthly mortgage payments will continue to fall due. In this case, it will be vital to speak to all lenders as soon as possible to advise them of the circumstances.
However, most lenders will ask you to take steps to continue to meet the mortgage payments.
Alternatively, they may agree to set up a payment holiday. This will allow you a period of grace for you to deal with issues that need to be tackled. This could help when you are not expecting the additional burden of loan payments.
Probate Property – Building insurance
Properties that are left empty deteriorate in some way or other. For example, a vacant house can become damp and attract pests; properties can sometimes attract anti-social behaviour like vandalism, arson or even squatting.
For these reasons, you’ll need a good building insurance policy.
If the property remains unoccupied, you must make the insurers aware of this. All insurers will request that you switch off the water, gas, and electricity supplies for safety reasons to prevent damage to the property while it is empty.
They may also request you to conduct regular property inspections checking for the condition and overall security of the vacant property.
We suggest you consider taking photographs of the condition of the inherited property during each visit, so you have evidence should you have to make a claim on the insurance.
Cost of Property Maintenance
As with all property, there is always the need to carry out some maintenance. This could range from cutting lawns and hedges daily, painting, cleaning gutters and repairing any leaks.
We suggest you visit the property as soon as possible and write out a complete list of any essential repairs.
You can then start to plan and arrange these to priority at a timescale that best suits you. You might be able to get a neighbour to provide access for contractors on your behalf. Bear in mind that finding good contractors at short notice can be challenging.
Travelling & inspections
Do underestimate the time you may have to devote to inherited property. If the property is close to home, this should not cause too much inconvenience.
However, if the inherited property is some distance away, you may have to consider how and when to visit.
The costs in both time and money could become significant as time goes by. You may consider sharing the burden with friends and family to spread the load in this case. You could request a friendly neighbour (if they are trustworthy) to assist you with regular inspections.
What type of taxes do I need to pay on the inherited property?
There are 3 property taxes you will need to consider when it comes to inheriting a house. These are:
• Inheritance Tax
• Capital Gains Tax
• Income Tax
Here we explain the ins and outs of each.
Current inheritance tax for a property?
In England and Wales, you will need to pay inheritance tax on a person’s estate (property, finances & belongings) if it is worth more than £325,000.
If the deceased left the estate to their children or grandchildren, the inheritance tax threshold goes up to £475,000.
This applies to adopted, foster or stepchildren as well. This threshold only applies if the person’s estate is less than £2 million. You can obtain further information about inheritance tax and pass on a home available from the HMRC website.
It is different if someone is married or in a civil partnership and their estate is worth less than their threshold. Any unused tax threshold can be added to their partner’s threshold when they die. This means their threshold can be double the standard rate, i.e., £950,000.
People that are executors or administrators of a Will have to arrange the payment of inheritance tax. They can use funds from the estate to make this tax payment.
Please seek independent advice from an accountant to ensure you have the correct latest information on inheritance tax.
What is the inheritance tax rate for a property?
Currently, the standard inheritance tax rate is 40%, only charged on the part of the estate above the inheritance tax threshold, i.e., over £325,000.
So, as an example, say the estate you have inherited is worth £500,000. With your tax-free threshold of £325,000, inheritance tax will be 40% of £175,000 (£500,000 minus £325,000); this example would mean a personal inheritance tax bill of £70,000.
Inheritance Tax can be reduced to 36% on some assets. This reduction applies if the deceased person leaves 10% or more of the estate to charity.
How to avoid inheritance tax on property
In some cases, the estate will not have to pay inheritance tax. These can be where the estate:
• all passes to the deceased’s spouse or civil partner, a charity, a community amateur sports club or
• Has a value below the inheritance tax threshold of £325,000. You may want to contact a tax accountant or HMRC to work out your family’s circumstances, remembering these can vary widely. You must be sure you’ve got this right before deciding whether to sell an inherited house or property.
Capital Gains Tax for property (CGT)
You do not have to pay any capital gains tax when you sell your main home. Instead, you get complete tax relief for this. However, the situation’s quite different when you sell a property that is not your main home.
This means that should you decide to keep the inherited property and rent it out, you will have to pay capital gains tax on any profit you make from selling the property later.
Capital Gains Tax calculations.
Let us look at an example. We assume a property was valued at £200,000 when you inherited it, and you then sold it ten years later for £300,000. You would have to pay a capital gains tax of £40,000 (£100,000 profit x 40%).
However, you should note that we all have a personal capital gains tax allowance. This can be used to help offset against the profit for the current tax year (2021/22). This is £12,300 per person. By taking this off the original profit, we would have a capital CGT liability of £35,080 (£100,000 minus £12,300 = £87,700 profit x 40% = £35,080).
Provided the property has previously been written into a deed of trust, you may also be able to deduct a partner or spouse’s capital gains tax allowance. If this is the case this could mean a capital gains tax liability of just £30,160 (£100,000 minus £24,600 = £75,400 profit x 40% = £30,160).
Remember that you can deduct all reasonable expenses during the ownership of the property to reduce your CGT liability. These are things like maintenance costs, accountant fees, estate agent costs and legal fees.
To have a reasonable idea of how much capital gains tax you will have to pay, you will need to determine how much the inherited house or flat is worth.
How to avoid capital gains tax on an inherited property
This is a popular question what are the loopholes to avoid capital gains tax?
Currently, there are only 2 ways to avoid paying capital gains tax on an inherited property. These are:
• To nominate the property as your principal residence (your home). By doing so, you can then claim Private Residence Relief on any eventual sale.
• To sell the property immediately on inheriting it for today’s value, so there’s no increase in value. You could sell via a traditional estate agent, at auction, or a regulated property buying company like us. We have more on this subject later.
HMRC has a handy online calculator if you have concerns about calculating capital gains tax.
We recommend you use this to ensure any inherited property taxes—an online calculator.
Do I pay Income tax on inherited property?
Income tax will only ever be charged on selling an inherited property if you have used it to generate an income. This would include renting it out. Rental income from the tenanted property will be subject to tax.
However, should you decide to rent out the property, you will need to complete a Self-Assessment filing under HMRC rules for each year of ownership.
Steps to selling an inherited property
Check if there is a Will in place.
The first thing to do is check if the person who died left a will behind. A Will may confirm if there are any names attributed to the property.
It can also detail specific wishes for how the deceased person’s estate will be divided. This can help you contact any named parties in the Will so that you can start the process of applying for probate.
If a Will is absent, you need to talk with a solicitor experienced explicitly in the wills & probate process. However, contrary to widespread belief, the presence or the absence of a will has no bearing on whether or not probate is required.
Regarding bricks and mortar, probate will always be required for an estate valued at £50,000 or more. This is because UK banks and financial institutions have varying limits in place regarding how much they are prepared to release upon a grant of probate.
How to apply for probate
Probate is the legal name for the process that arranges and draws up a list of all financial assets of the deceased person’s estate. The purpose is to give a person (or persons) the legal authority to deal with a deceased person’s estate.
These people are known as executors within the official document called the Grant of Probate.
The situation regarding property is much simpler if you are a named beneficiary within a will.
This is someone handed a share of the estate by the person who directly inherits it.
Before selling an inherited property, you must establish your relationship with the property.
We recommend you talk with a solicitor specialising in the administration of deceased estates to find out more. Our legal department can offer you free advice and recommend wills & probate solicitors.
It is wise to ask your solicitor about any extra costs for them to deal with the inherited property. However, you do not want a surprise when you receive a bill.
Situations where you may not need probate
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 legal owners, or if
• they only had savings or premium bonds
You will need to contact each asset holder, such as banks and mortgage companies, to find out if you need probate to access the deceased’s assets. You will need the original death certificate, which is vital for dealing with many aspects of the deceased’s estate.
Different rules apply to each organisation, mainly when selling an inherited property or house.
Our guide on how to sell a house in probate (probate property).
Selling an inherited property
In deciding how to sell your property, you have three distinct options. Here we list each with its advantages and disadvantages.
Traditional Estate Agents
• The best way to go if you are looking to get the maximum price for your property
• May have the best understanding of an area (if this is important to you)
• Typically, the slowest route to selling an inherited house or property (3 – 9 months)
• Potential Buyers often re-negotiate the final sale price after the survey has been completed
• Could tie you into a long-term marketing contract until the property is eventually sold
Auction House Quick Sale
• You can set a ‘reserve’ figure to establish a minimum acceptable price
• No guarantee the property will sell
• Often have to wait for the next auction date to come around (2 – 3 months down the line)
• Pay upfront costs entry fee, which can be £1,500
• Your solicitor fees to prepare an auction legal pack cost around £1,200
• Properties sold in an auction generally fetch anything from 20% to 30% less than the market value.
Regulated cash buyer property buying company
• You get a discrete sale within 28 days (no need for a ‘For sale or ‘Sold’ board)
• Cash buyer – Cash sale with no mortgage funds required
• Once the purchase price is agreed upon, there is no further negotiation
• Your solicitor’s fees are paid for you
• No survey
• No delay in the sale, so you save on council tax for an empty property, building insurance and utilities.
• We can’t think of any!
Pay inheritance tax (if necessary)
As detailed above, you’ll need to calculate the inheritance tax carefully you must pay. You can do this by using the online HMRC calculator or talking this through with an accountant.
Pay Capital Gains Tax (if necessary)
Remember that it’s essential to pay any capital gains tax due promptly. HMRC now insist on reporting capital gains tax returns within just 30 days of the sale of a property. They will charge interest if you miss this deadline and may even invoke a penalty notice. Ensure you have a complete list of all costs incurred to date so these can be deducted from your profit.
Pay Income tax (if necessary)
Don’t forget that income tax will only be payable if you’ve used the property to produce an income, such as renting it out. If this is not the case, you can ignore this tax.
How to sell an inherited property
One of the selling options is to put the inherited property at auction. There is a severe risk that if the property does not sell, you would have paid substantial costs for the auction entry fee and your solicitor preparing a property auction legal pack.
You would have lost considerable time attempting to sell the property, which means you continue to pay council tax on an empty property.
The property market is cooling due to interest rates increasing as inflation is due to hit double digits. This coupled with COVID-19 and the Ukraine war; the property market is cooling, so selling a property is not easy.
Let us assume you have managed the probate process and sorted out all the paperwork. So now you own the property – or at least a share of it.
And so, the final thing to consider is to establish if the property could be sold quickly in its current condition. By this, we mean could it be sold in a matter of weeks for a reasonable price.
It is well-known that most house buyers like to buy modernised properties with all the mod cons. However, if your inherited property is not modern, remember that it may struggle to sell. In this case, you may consider what it would take to refurbish the property to sell.
From our experience, a typical full refurbishment takes around 12 weeks to complete and costs £30,000+. Do you have the time, money, and energy for what could be a lengthy and expensive project?
You should also consider the cost of building insurance, council tax and utilities.
Remember that you must also find trusted trades to complete the necessary refurbishment work. You will likely need to project manage the refurbishment process yourself.
Choosing the right property buying company
You may wish to consider selling your inherited property quickly and without the heartache. While you may have an emotional attachment, a clean break could help you move on. It could also be just the tonic to enable you to realise some long-held plans.
An easy solution is for a reputable property buying company to step in and buy your property quickly. If you decide to go down this road, look for a company like ours with a proven reputation for buying inherited homes.
Professional homebuyers should provide a genuine and quick route to sell an inherited house without any headaches. Your chosen homebuyer should be accredited by organisations like The British Landlords Association or The Institute of Property Investors.
Questions to ask house buying companies
Do they have an ethics policy and terms & conditions?
Do they adhere to the standards set by the Institute of Property Investors? Not all cash buyers will meet these standards.
As you make your choice, look at whether property buying companies can offer you the following benefits:
• Do they have access to a substantial cash fund? This ensures the company can buy your property within just 28 days – or within a timescale that best suits you.
• Will they keep the process straightforward? You may have enough to deal with following the recent passing of your 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 any location?
So, while there are plenty of companies to help sell an inherited property, we recommend you consider your decision carefully.
We know that selling your inherited property will mean more to you than just bricks and mortar. But, aside from its financial value, selling a property after the death of a parent or loved one can spark strong emotions.
We believe sellers deserve clear, straightforward communication throughout their dealings with a property company.
You can obtain free legal
advice from Probate Legal Advice, a free national probate legal helpline. This organisation is well aware that you might be experiencing a tough time due to losing a loved one and will explain the legal process to you.
Suppose the probate property is one you have inherited, and the property owner is rented. In that case, they can also go through the rental income and any issues with the tenanted probate property.
You should seek professional legal advice if the probate property is rented, as there are several issues you will need to deal with if you have or are about to inherit a rented property.
You can speak to our legal team for free advice or contact Landlord Advice UK, who can offer free expert advice.
Suppose you need legal advice on freehold property or leasehold property that you have inherited or how to deal with the mortgage lender. In that case, probate legal advice is an excellent free service.