Inheritance house sales process & how it works
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In the UK, on average, people who inherit from their parents, receive over £195,500 with over £182,500 coming from the sale of property alone.
Inheriting a house can be a massive financial and emotional responsibility. While it offers opportunities, such as financial gains or rental income, selling an inherited property often comes with its own challenges.
From navigating the probate process to managing the costs, taxes and legal requirements, you may find yourself spinning multiple plates at once to keep the sale moving forwards.
On this page, we will explore how inheritance impacts the sale of a house, and what different factors can change the outcome of what you do with the property.
How does inheritance affect the sale of a house?
When it comes to selling an inherited house, there are a few things that come into play that can affect the speed, cost and tax implications of the sale…
Speed of sale
Selling an inherited property is often subject to several legal and administrative loops, primarily the probate process. Probate is the court-supervised procedure for validating the deceased’s will and ensuring all outstanding debts and taxes are paid before the house can be sold.
If probate is required, it can delay the sale, sometimes taking months or even years, depending on the complexity of the estate and any disputes among beneficiaries. However, in certain situations, you can sell the property before probate is fully granted, provided a buyer is willing to wait until you get probate granted.
To speed up this process, many executors and beneficiaries opt to sell to cash buyers which can speed up the traditional delays associated with chains and mortgage approvals.
Cost of the sale
The costs associated with selling an inherited property can vary depending on the method of sale and the property’s condition.
Inherited properties often require repairs, upgrades, or a deep clean before they’re market ready. If the house has been empty or is in poor condition, these costs can escalate quickly.
Using an estate agent to market your property will usually result in a percentage based commission (often around 1% to 3% of the sale price) as well as conveyancing fees. For a direct sale to an investor or cash buyer, these costs can be significantly reduced.
You may also incur utility bills, council tax and mortgage repayments (if applicable) while the house is on the market – although some of this may be exempt due to some lenders offering a ‘grace’ period.
Taxes on the sale
While taxes related to inheritance, such as Inheritance Tax are handled during probate, the actual sale of the property has its own taxes, as it is seen as a transaction rather than a transfer.
If the property’s value has increased since it was inherited, beneficiaries may be liable for Capital Gains Tax on the profit from the sale. But, this only applies if the property is not your main residence.
Luckily, there is no Stamp Duty liable for you, but buyers will need to account for it, which may influence the price they are willing to pay.
Why is probate often required for selling an inherited property?
Probate is often a necessary legal process when selling an inherited property because it makes sure that the deceased’s assets, including property, are distributed according to the law. This process provides clarity and protection to all parties involved in the transaction.
Probate was introduced in England and Wales on January 2nd, 1858, establishing a centralised system for verifying wills and managing the estates of deceased individuals. The Principal Probate Registry was created to maintain copies of wills proved after this date and letters of administration for cases without a valid will.
The process was designed to confirm the death of an individual and provide a structured framework for distributing assets. This shifted control of estate distribution from the Church to a formal legal system, offering greater protection and transparency.
Probate serves a few different other purposes, other than legally confirming a death & the distribution of an estate:
Verification of ownership: Probate legally confirms the executor’s authority to manage and sell the property. Without probate, it would be unclear who has the legal right to transfer ownership of the property to a buyer.
Reassurance for buyers: Buyers need assurance that the person selling the property has the legal right to do so and that no disputes will arise after the sale. A grant of probate acts as proof that the executor is authorised to sell the property on behalf of the estate.
Protection for financial institutions: If there are outstanding debts, such as a mortgage on the property, probate provides reassurance to lenders that these obligations will be settled during the sale process. This protects both the financial institution and the executor from any legal complications.
Can you do inheritance yourself?
If you have inherited a house, whether you can manage the inheritance process yourself depends on whether you are the executor of the will. The executor is the person named in the will to handle the estate. If there is no will, the responsibility may fall to the next of kin or an administrator appointed by the court.
Only the executor or administrator has the legal authority to carry out DIY probate if it is appropriate for the estate. DIY probate is usually suitable in specific circumstances, like:
The estate is small, simple and does not have any overseas property or significant investments.
There is a valid will clearly outlining the distribution of assets.
There are no inheritance disputes among family members or beneficiaries.
The estate does not owe Inheritance Tax.
While carrying out DIY probate can save on legal fees, it does require a significant amount of time, effort and attention to detail. Mistakes can lead to delays or disputes.
When might it be better to use an inheritance solicitor?
Using an inheritance solicitor can be beneficial when the estate is complicated or if you are unsure about handling the process on your own. Solicitors bring expertise and can manage the entire process efficiently, reducing stress and making sure compliance with legal requirements.
You might consider hiring a solicitor if:
The estate is large or complex: For example, estates with multiple properties, businesses, foreign assets or significant investments may require specialist knowledge.
Inheritance Tax is due: Calculating and filing Inheritance Tax can be complicated, particularly if you need to make use of tax reliefs or exemptions.
There is no valid will: If the deceased died intestate (without a will), the rules of intestacy can be complicated, and professional guidance may be needed.
Disputes arise: A solicitor can mediate or present you in contentious probate situations, such as disputes over the will or disagreements among beneficiaries.
You lack time or expertise: If you’re busy or feel overwhelmed by the legal and administrative responsibilities, a solicitor can handle the process for you.
Is there a time limit for completing inheritance?
There is no strict legal deadline for completing inheritance or administering an estate in the UK, but there are specific timeframes and deadlines for certain aspects of the process that executors or administrators must consider. Delays in meeting these can lead to complications, fines or disputes.
4 key inheritance timeframes to be aware of:
Applying for Probate or Letters of Administration
While there is no fixed deadline to apply for probate, it is generally advisable to begin the process as soon as possible after the death. Delays can cause issues, particularly if assets need to be accessed or debts need to be settled.
Inheritance Tax deadlines
If the estate owes Inheritance Tax, the executor must pay it within six months of the date of death. Failure to meet this deadline can result in interest charges on the unpaid tax.
For larger or complex estates, HMRC allows payments of Inheritance Tax in instalments in certain circumstances (e.g. large properties or agricultural land), but interest may still accrue.
Settling debts & distributing assets
Executors should aim to settle outstanding debts, including mortgages, utility bills and taxes, before distributing the remaining assets to beneficiaries.
While there is no legal time limit, beneficiaries can raise concerns if the process takes an unreasonable amount of time, usually more than 12 months (often referred to as the “executor’s year”). Delays beyond this may lead to legal action or disputes.
Claims against the estate
Under the Inheritance (Provision for Family and Dependants) Act 1975, eligible individuals (such as dependants or close family members) have up to six months from the Grant of Probate to make a claim against the estate. Executors may delay distributing the estate until this period has passed to avoid potential legal complications.
Is it legal to find a buyer before receiving probate?
Yes, it is entirely legal to find a buyer for an inherited property before receiving probate, but you cannot complete or exchange contracts until probate is granted. Whether you choose to sell on the open market or to a cash buying company, securing a buyer early can help speed up the overall process.
Benefits of finding a buyer early
Securing a buyer while waiting for probate ensures that the sale can proceed quickly once the legal formalities are complete.
It allows them to finalise any necessary paperwork, gather valuations, and address any property related issues without delaying the transaction.
Considerations when selling on the open market
If you choose to list the property on the open market, be mindful that:
Buyers may lose interest or find alternative properties while waiting for probate to be granted.
Issues with financing or changing circumstances could cause delays or even cause the sale to fall through.
If you’re concerned about the challenges of selling your inherited property on the open market, opting to sell to a cash buying company can be a highly practical and stress free alternative. Companies like ours provide a secure and straightforward solution, especially for probate properties.
Once we agree on a sale price, you’ll have the peace of mind that the deal won’t fall through due to financing issues or buyer indecision – common risks when selling on the open market.
We maintain a multi-million pound cash reserve, enabling us to buy your home as soon as probate is granted. This financial flexibility eliminates delays and ensures the process is as smooth and efficient as possible.
With all paperwork prepared in advance, you could complete the sale on the very day probate is approved, further minimising waiting times and allowing you to move forward quickly.
Who decides how the estate is distributed?
The distribution of an estate depends on whether the deceased person left a valid will or died intestate (without a will). Here’s how the process works in both scenarios:
If there is a will:
When a valid will exists, the executor named in the will is responsible for distributing the estate. After all assets are collected and debts paid — including any loans taken out to cover the Inheritance Tax, the executor must ensure the estate is distributed according to the deceased’s wishes outlined in the will.
Beneficiaries & legacies:
If the will names multiple beneficiaries or includes legacies (specific gifts), the executor must follow these instructions. However, legacies can fail or become invalid for several reasons (e.g. the beneficiary predeceased the testator, the asset no longer exists, etc), so seeking legal advice before distribution is recommended.
Executor responsibility:
Executors bear legal responsibility for the distribution of the estate. Mistakes, such as distributing assets incorrectly or prematurely, can lead to personal liability.
Property distribution:
If the estate includes property, it can either be transferred directly to a beneficiary as part of their inheritance or sold to settle debts, depending on the estate’s financial situation and the terms of the will.
If there is no will:
When the deceased dies intestate, the estate is distributed according to the Rules of Intestacy, which are predetermined by law. The administrator is appointed by the court, if not found through the family, and must follow these rules strictly.
Hierarchy of distribution under intestacy rules:
Spouse only:
The surviving spouse inherits the entire estate, provided they survive the deceased by 28 days.
Spouse and Children:
The spouse inherits:
All personal chattels (e.g. belongings, cars).
The first £250,000 of the estate (or the total value if it's smaller).
50% of the remaining estate
The children inherit the remaining 50%, divided equally.
Children only:
The estate is shared equally among children.
No spouse or children:
If there are no direct descendants, the estate is distributed equally among parents or siblings (or their descendants).
No surviving relatives:
If there are no eligible relatives, the estate passes to the Crown as bona vacantia.
Co-habitees & intestacy
Co-habitees who are not married or in a civil partnership are not entitled to inherit under the interstate rules. If a co-habitee wishes to claim part of the estate, it may lead to contentious probate.
Should you keep the property?
When inheriting a probate property, you generally have three options: keep it, rent it, or sell it. The decision ultimately depends on your financial situation, personal preferences and long term goals. Here’s what to consider when deciding whether to keep the property:
Keeping the property
If you choose to keep the property, it can become your primary residence or a secondary property. However, there are some important considerations:
Primary Residence Rules: Only one property can be designated as your primary residence. If you keep the inherited property as a secondary home and decide to sell it in the future, you may be liable for Capital Gains Tax on any increase in its value since the time you inherited it.
Ongoing costs: Keeping the property means taking on any associated costs, such as maintenance, insurance, council tax and utility bills. Make sure you can comfortably manage these expenses alongside your existing commitments.
Renting out the property
If you’re not ready to sell the property but don’t want to sit idle, renting it out could be a profitable option. Renting allows you to generate a regular income while retaining ownership.
Rental income potential: Consider the rental market in the local area. A well located property can yield steady returns, but you’ll need to account for expenses like property management fees, maintenance, and taxes on rental income.
Landlord responsibilities: Becoming a landlord involves managing tenants, complying with legal requirements like the Renters Bill, and ensuring the property meets safety standards.
Selling the property
Selling the property can provide you a lump sum that you can use for other financial goals, such as paying off debts, investing, or funding your retirement.
If you decide to sell your inherited property, then you will need to decide if you want to sell with a traditional estate agent, an online estate agent, a property auction or a cash house buyer. All of which will provide you with a different amount of profit, and help you sell at different times:
Traditional estate agents can help you sell in 6+ months, maybe helping you get full market value, but they cost anywhere from 1% to 3% +VAT in estate agency fees.
Online estate agents can help you sell in 6+ months, maybe helping you achieve 95%+ your market value, but they only offer a basic ‘free’ package, with hidden fees for necessary additional services.
Property auctions can help you sell in a month, and help you find cash buyers but there is no guarantee that your house will sell – you will also face high auctioneer fees.
Cash buying companies will buy your house directly, in as little as 7 days, all while covering your legal fees and selling costs – but you will receive less than market value.
Why choose us to sell an inheritance property?
Here at The Property Buying Company, we are one of the UK’s leading cash house buyers and will buy your inherited property directly from you, in as little as 7 days. We cover all the selling fees associated with the house sale, including legal fees – meaning that you won't face any additional costs at the end of the process.
What makes us different from the rest of cash buyers, is that we have a team of over 40 property professionals, based across the country, all working together to make sure we get your house sale over the line on a timescale that suits you.
We have over 200 years of combined experience in the buying and selling of property, and have over 13 years of practical experience in cash buying. We are also the UK’s most rated cash buyer, with over 2,000 ‘excellent’ reviews on Trustpilot.
And the best bit? We are specialists in buying probate and inherited properties, meaning that we will support you throughout the entire process. Want to learn how much we will give for your inherited property? Simply fill in your postcode below…
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