Buyers Guide for Inherited Property
If you have recently inherited property or believe you have, there is a lot you need to think about and consider. It can sound like a dream come true, discovering you’ve inherited property, but the reality of this situation is not always so simple and easy. For one thing, there is a lot of emotional pain and stress involved in the grief over a loved one. Then there’s also the financial and legal side of things and lots and lots of paperwork to deal with. To help you make sense of everything and understand the most important aspects of it all, especially if you have been searching “sell my inherited property” on Google, with this buyer’s guide.
First things first…
Does the Deceased Have a Will?
The very first thing you need to do, if you haven’t already, is to check whether you have a legal relationship to the property. Is it your parent’s property or does it belong to another relative? More crucially, are you named as a beneficiary on the will?
As well as ascertaining your legal rights to the property, this will help when it comes to probate. It may be if you are named as an executor, then you will be able to apply for what is known as a grant of probate. However, if there is more than one executor, you will need to check the application form and read the guidance notes.
What is Probate?
Probate is the legal procedure that is put into action following someone’s death and involves the distribution of assets outlined in their will by ensuring the right people have the legal authority for handling the will and estate.
There are situations when probate is not necessary. For example:
- The deceased had money, shares, property, or land that they jointly owned as this will pass automatically to the other owners that are still alive.
- They only had premium bonds or savings
To check what the process is for each asset in their estate, though, you will need to check with the financial organisation that holds them, whether you need probate or not.
The Probate Application
If you are the executor of the deceased’s will, you can put forward the probate application directly by yourself. As an alternative, however, you could appoint a licensed professional such as a solicitor to handle probate on your behalf. Without a will, before probate, you need to apply for what is known as “letters of administration”.
The Cost of Probate
Probate varies in price, depending on who you work with. Solicitors and probate specialists will charge either a fixed or hourly rate. On average, the cost of a probate claim can be 1 to 5% (+VAT).
How Long Does Probate Take?
This is the biggest issue with probate – it can take a long time to be granted. Typically anything from 6 to 12 months. Often if there is an existing will, it can take a lot less time, but this is no guarantee. Although it is not necessary for everyone who inherits property to start probate proceedings, it’s worth investigating.
Inheritance Tax and Capital Gains Tax
It’s not just probate you need to be aware of if you inherit property, you need to consider the various taxes you may be required to pay. For instance, although you don’t need to pay capital gains tax on the sale of your main property, if you make any profit from an additional property, for instance when you sell inherited property, you are required to pay capital gains tax.
Inheritance tax is also something you need to consider too. The good news is, though, you may not need to pay it, if:
- The value of the estate is below the threshold of £325,000
- All of the estate is passing to their spouse or civil partner, community amateur sports club or charity.
Live In, Rent or Sell
There are three options that most people with inherited property normally choose between. Living in the inherited property might seem like a good idea, but only if you are going to sell the property you currently are living in. Likewise, renting may seem like the perfect solution – a nice bit of easy income every month. But, being a landlord is not as easy a job as it may sound. Selling is therefore one of the best ways to deal with inherited property. There are still issues you need to consider if you choose that route, like how you are going to sell it. One of the easiest ways is by choosing a company like Cash Home to take care of it for you.