
You may have heard the famous saying “nothing in life is as sure as death and taxes”. Usually when it comes to selling deceased estates, then, taxes are sure to follow – especially when the estate value is in excess of £325,000
Inheritance tax (IHT) is a tax on money or possessions you leave behind when you die, and on some gifts you make during your lifetime. However, a certain amount can be passed on tax-free, which we call the ‘tax-free allowance‘. This is also known as the ‘nil rate band‘.
Everyone in the 2016-2017 tax year has a tax-free inheritance tax allowance of £325,000. The allowance has remained the same since 2010-11, and will stay frozen until at least 2019.
What is Probate?
Probate is the legal process whereby a will is “proved” in a court and accepted as a valid public document that is the true last testament of the deceased.
When a Property Owner Passes Away
- Seek professional advice where required from – property lawyers, accountants, the land registry, RICS, estate agents, the Probate Service.
- Usually, the deceased’s will specifies a named person to deal with the estate (or the deceased’s next of kin if there is no will). They are responsible for the legal affairs and will often obtain ‘probate’ or ‘letters of administration’, which enables them to act as the personal representative (PR). Probate also enables the PR to transfer or sell the property.
- If the property is to be sold, the Probate gives the PR the authority to sell it in accordance with the terms of the will. If the property is registered and the person who died was the sole owner then PR will often either Assent (form AS1) the property to the person(s) who inherits it or Transfer (form TR1) the property to someone else.
- If the deceased was a joint owner and the partner is still alive, you would normally just register the death by lodging a form DJP (Deceased Joint Proprietor), along with an official copy of the Probate or death certificate.
- Much will depend on what the deceased owned as well as what the beneficiaries intend to do with the property. In most cases there is a need and or desire to sell the property either to pass down the sale funds to the beneficiaries and or to cover taxes, mortgages or other debts and liabilities.
For many people, one of the hardest things they ever have to do is sell the family home after parents/relatives have passed away or gone into care. It can be a very sensitive time and the stress of having to put a property on the market coupled with the grief of losing a loved one can sometimes be too much to bear. In addition, there may be several family members involved who do not all agree on the best way forward and this can causes added tensions. This is where selling off market to professional property buyers who can offer a fair cash price for a quick sale can really pay off. 365 Property Buyer offers a free, no obligation instant, online cash offer. It’s discreet, confidential and there are no unwanted visitors to the property.
Things to consider when selling probate or inherited property on the open market or private treaty through estate agents:
- Updating and modernising. The property may need fully modernising or be in need of refurbishment – this will reduce the number of buyers and suitability for mortgage and present more problems than anticipated on survey or valuation.
- Chattels, clutter & furniture. There may well be years and years of clutter that has built up throughout the property leaving it in rather a ‘busy’ state. You may want to consider clearing and cleaning the property making it less scary and less off putting to potential buyers.
- Insurance – make sure the property is insured, although you may need to pay a premium for empty homes insurance and need to carry out regular security checks.
- Council tax – make sure you tell the council that the property is unfurnished and vacant, you should get a reduction in council tax, albeit not for very long.
- Time. Give yourself plenty of time. 6-9 months is generally advised to allow time to not only agree a sale but for the sale to complete, assuming no major issues or delays.
Returning to the property and letting in Estate Agents and strange people will be upsetting but you must invite over at least 3 Estate Agents and say 2 Property Auctioneers and listen to their valuation figures carefully. If the property is rather dated (as is often the case) be prepared for some modest figures.
Go with the estate agent or auctioneers that provides the most compelling evidence to back up their suggested sale price – make sure they provide sold price data, evidence of recent sales comparable to your property – too many Estate Agents in UK over value to get your initial instructions then chase for price reductions.
Clear the property of all the clutter and personal belongings making sure you use what furniture you can to dress each room this will help make the place feel warmer and more inviting. Completely empty houses always look sad and lonely, in addition photographs of empty rooms do not make pretty pictures.
Let the Estate Agent take all of the viewings. Potential buyers will be talking about “refitting the kitchen” and “tearing out that old bath suite”, not things you will want to hear if you grew up in the property.
Finally, make sure that all family members involved in the sale are easily contactable: time can be of the essence when offers start coming in from interested buyers. You should all agree well in advance what you are prepared to accept in the way of offers. If offers are not forthcoming within a few weeks then be prepared to drop the price a little.
If you stick to these guidelines then you should find a buyer relatively quickly. Bereavement properties often attract a lot of interest due to their modest prices and lack of onward chain.
If some or all of the above all seems just a bit too much like hard work, time consuming, costly, daunting even, or you simply cannot be bothered and want to sell a probate-inherited flat, bungalow or house ASAP and release the equity to the beneficiaries and move on then there are plenty of cash buyers out there offering genuine quick cash sales. Just make sure you contact 365 Property Buyer who will advise on all the selling options open to you such as quick cash sale, options, underwriting agreements, planning, development or even joint auctioneer services to ensure you get the best price from the sale in the shortest possible time.
Sorting out the affairs of the deceased can be quite tricky. Dealing with the property is often just one task of many, so if you are unsure then we would always recommend seeking further advice: Wills, probate and inheritance overview