Selling an inherited property? We Buy Inherited Property Fast.
Selling an inherited property can be a stressful and even traumatic experience. Often beneficiaries and executors who find themselves in this situation for the very first time will struggle with the whole process.
Our guide simplifies the process of selling an inherited property. We recognise that selling a property takes organising and often under stressful circumstances with a loss of loved one, it can be overwhelming. There are a number of formalities that make this process tricky. If you are not careful, it can cost you thousands of pounds in professional fees by probate solicitors and estate agents.
The good news is that with the right guidance, you can reduce the stress of selling an inherited property. More importantly you’ll know what to do and when.
Our guide to selling probate property includes:
- How to apply for a Grant of Probate.
- What to do if you are due inheritance tax from sale of your inherited property?
- Dealing with Utilities and the Council.
- Capital Gains and Inheritance Tax.
- How to sell your probate property?
- Avoid these 3 mistakes – how to get thousands MORE for your inherited property.
How to apply for a grant of probate?
Before diving deep, let us take a look at what probate is according to Oxford Living Dictionaries:
“A verified copy of a Will with a certificate as handed to the Executors.”
‘She has been granted a probate to execute her late father’s estate’
Probate is essentially the process of applying for the right to deal with a loved’ one estate after they have passed away. Their estate may include property, car, bank accounts, jewellery or collectables such as art. You can only apply for a grant of probate to sell an inherited property if you are named as the Executor on the Will.
An Executor can apply for a grant of probate from the probate registry. You can find your nearest probate register office here. Once you have obtained the grant of probate, it proves that as an Executor, you have authority to deal with the deceased person’s estate, allowing the Executor access to their bank account and to share out any assets or money amongst the beneficiaries.
Should there be more than one Executor on the Will, the probate application form and guidance notes will explain in detail what to do.
If no Will was left, a relative or close friend can still apply to the probate registry office. However, in this case, they will apply for ‘a grant of letter of administration’. If this is granted, they will be referred as ‘Administrators’ and have the same authority as an Executor.
Applying for Probate is not necessary in the following circumstances:
- If you already owned a share of the property with the deceased i.e. a married couple and therefore, because you are joint owners when one owner passes away, it automatically transfers to the other party. Learn more about tenants in common.
- You have a joint bank account or a savings account. The bank will only need to see the death certificate to transfer the funds to you. A grant of probate may still be needed if there are substantial funds or assets held in bank accounts or for life insurance pay-out.
Applying for probate
You can apply for grant of probate yourself or if you prefer to appoint a solicitor. Before you post any forms, you will need to establish assets and liabilities left by the deceased. This means adding up value of property, bank accounts, investments and personal possessions. You’ll also need to tally up any loans, credit cards and mortgages that are outstanding.
You can apply for probate either by yourself or through a solicitor, if you prefer. Before you send off any forms though, there are certain things you need to check first.
Now that you have got that all wrapped up, you will need to officially apply for grant of probate. You can do this by:
Completing a probate application form
Completing an inheritance tax form
You will need to establish what the estate is worth. Then based on the value of estate, you may need to pay inheritance tax. But even if there is no tax to pay you will still need to fill out an inheritance tax form.
And finally posting your completed application
Once all forms are completed, you will need to send your application to the probate registry office ideally as a recorded delivery. Your documents will need to include:
- Probate application form PA1
- Inheritance Tax form
- The death certificate
- The original Will and 3 copies – and any amendments to it
- The application fee of £215. There is no fee if the estate worth less than £5,000.
Swear an Oath
You will be sent an Oath by the Probate Office. This Oath can only be witnessed by either a commissioner for Oaths such as a solicitor or your local Probate Office. There is a normally charge for this.
This oath is a legally binding document and you will promise that all the information you have provided is the absolute truth.
What to do if you are due inheritance tax from sale of your inherited property?
Depending on your position we will explain how to deal with inheritance tax as the process can vary.
If you are an Executor selling to pay inheritance tax:
You can put the house up for sale on market before you have the grant of probate in your possession. Obviously a sale will not go through until you have all the documents in your possession. If you are thinking of keeping the property and you are sole beneficiary then you can choose to pay inheritance tax in annual instalments if you prefer. Check the position of inheritance tax with your local accountant.
Remember once you sell the house, you will need to deduct all costs from proceeds of sale, and not forgetting to deduct the inheritance tax. Once all deductions have been calculated, the remaining amount can be distributed between the beneficiaries.
Property Saviour specialise in buying inherited properties, and we can help you sell your property quickly at a fair price. The upside of this is that with sale concluding within a couple of weeks, you will not have to pay for extensive ongoing costs of maintenance of property, empty property insurance that can be expensive and potentially reduce your legal bill if this applies.
As a beneficiary:
The great news is that as a beneficiary you do not need to pay any inheritance tax on anything you inherited from the deceased’s estate. Do not expect to receive your inheritance straight away unless the property sale can be quickly concluded with a cash buyer like Property Saviour. Executor will need to make sure that debts on the estate is settled before proceeds from inheritance can be distributed.
How to sell your probate property?
First you need to establish that you are a rightful heir to the estate of the deceased. Even if your name is mentioned in the Will as someone who has inherited the property, you will still need to apply for a grant of probate in order to allow you to legally sell the property. A grant of probate will only be issued to the Executor of the estate.
If you are a beneficiary then you are someone who has been issued with a share of proceeds from the sale of the property. This is much more simply affair than being an Executor. In some cases, a solicitor can act as an Executor.
In almost all of cases, the longer a sale of an inherited property drags on, the more bills are piled up such as property insurance, utility bills, maintenance and keeping an eye on the property, solicitors’ fee as they are on hourly rate and so on. Many of these costs are avoidable and therefore, you can get more money in your pocket faster, as you will soon learn.
Dealing with Utilities and the Council.
When you are trying to sell your inherited property there are a number of out of pocket expenses you will incur. These will need to be paid regularly typically monthly via Direct Debit:
- Ongoing standing charges for gas, electricity and water until the property is sold.
- Council tax bill or court action if council tax bill remains unpaid. Be careful some councils charge as much 200% council tax because the property is empty. Contact us and we can help.
- A house that is empty for more than 30 days will not be insured. You will need to buy a full perils empty house insurance that can run into thousands of pounds in each year. Often insurers will not renew empty property cover once it has been 12 months because empty property cover is seen as temporary insurance cover.
Capital Gains and Inheritance Tax
What is the key difference between Capital Gains Tax and Inheritance Tax?
You will need to pay inheritance tax on deceased’s estate if it is worth more than £325,000. You will need to pay this if you are the Executor or the Administrator of the Will. You will need grant of probate or letter of administration. You can use funds from the estate to pay the inheritance tax. You will have 6 months after the person has died to pay the tax. You may wish to read on about how to sell your inherited property quickly below.
At the time of writing, the rate of inheritance tax is 40% on anything above the threshold of £325,000. This can be reduced to 36% if 10% or more of the estate is donated to charity.
Whereas, Capital Gains tax is the tax on the profit you make from the sale of the assets you have acquired. So say you have inherited a property and it is valued at £300,000, you have decided to keep it and 10 years later, it is worth say £600,000 then you will pay tax on £300,000 gains at point of sale.
Avoid these 3 mistakes, how to get thousands more when selling your inherited property?
Save yourself some time and energy by finding out how to avoid the most common issue that arise. It really does pay to have an idea of the possible problems when you are looking to sell an inherited property. We have helped dozens of executors sell inherited properties and through this experience, we decided to share knowledge of the 3 most costly mistakes…
Selling Inherited Property – The First Mistake:
The deceased person may have appointed their solicitor as the executor of their Will. In a recent BBC Radio Programme ‘You and Yours’, it was revealed that some solicitors will charge up to 5% of the value of the estate as their administration fee. This is ridiculously high and disproportionate to the actual work carried out by these solicitors. Our advice is to apply for a grant of probate yourself. You don’t have to trust your solicitors to sell your inherited property!
Selling Inherited Property – The Second Mistake:
Instructing an estate agent for probate valuation. Estate agents are viewed as the best place to give you a valuation when you are looking to sell an inherited property or house. However, it is not always as simple as that.
Estate agents will tend to over-value your property to win your business. If they tell you they can get you more money for your property then they are more likely to hook you in. The results over-valuing your property will either be:
- Your property is sold at the asking price in a rising market, but you will have had to wait until the market have gone up enough to make your inherited property look like a bargain.
- You will have to reduce the asking price on your property several times until it reaches the real market value.
The one thing that is for sure is that it will usually take you between 6 and 12 months to actually sell your property, and possibly even longer.
Selling Inherited Property – The Third Mistake:
Assuming that your inherited property is fully insured. Whatever you do, don’t assume your property is insured, you must find out and get the relevant cover. Assuming you have cover can be a huge mistake as insurance companies will not cover a property if it has been unoccupied for 30 days or more. You actually need a specific vacant property insurance cover after this time.
Property Saviour can buy your inherited property. We make the entire process of selling an inherited property totally hassle-free. We offer a number of incentives including a free valuation, fast completion, free house clearance and up to £500 towards your legal fees. We are experts in buying probate properties so why not make an enquiry today.
SPECIAL OFFER: Accept our offer this month and we will cover all property related expenses including bills and insurance once we have exchanged contracts typically in 10 days.
Let us help you sell your inherited property or house – within days, not months. Our team are here so just call us now even in late evenings, we can take your call. Our telephone number is 0113 320 6700.
We will any type of inherited property in England, Wales or Scotland. We have cash funds ready to exchange contracts and buy the property in days. Whatever, the condition of property we will buy it.