An inherited property usually has to be sold before the beneficiaries can obtain their share of its value. For many, it is the home of a deceased loved one that makes up much of the value of their estate, and managing it without problems involves dealing with several factors that many are unaware of.
Assuming that the house is vacant and no longer needed, the key to successfully selling it is the existence of a Will, which should clearly name its executors and beneficiaries. Before acting on behalf of the deceased, the executor must obtain a grant of probate document, which is obtained from the Probate Registry. This can be done via an appointed legal provider who acts on behalf of the executor for a fee.
Once the grant of probate is obtained, the executor can then sell the house in the normal way, usually via an estate agent. With vacant possession, it is obvious that the property is well-maintained prior to its sale in order to get the best price; this can involve employing a gardener, managing on-going heating, doing regular repairs, and handling the disposal of any furniture.
However, achieving the sale is by no means the end of the story, as there will almost certainly be various bills to be paid off before any residual money can be distributed to beneficiaries. For estates with total assets worth more than £325,000, there is inheritance taxto be paid at the rate of 40% for all monies over that threshold, but note that this is payable only after all outstanding bills have been deducted. With estate agents, utility bills and any unfinished loans such as a mortgage, this will often keep the final estate value under the £325k tax threshold.
Another complicating factor can be Capital Gains Tax(CGT) which applies if the property’s value increases in the period between bereavement and sale. Each beneficiary is allowed £11,000 before CGT applies (18% for basic rate payers or 28% for higher rate), so unless house prices are moving fast or there is a long delay before sale then CGT may not become a problem. CGT is payable by beneficiaries from the proceeds of the estate.
Inheriting property as a result of a death can cause a mixture of feelings; and having to deal with legal problems during a period of mourning is the last thing anyone wants. Therefore, it is important to ensure that the legacy of your loved one is properly preserved by contacting a professional company for assistance.