How to sell an inherited UK property if you're living overseas

Selling an inherited UK property while living overseas is not impossible. However, this is a rather complex and emotionally charged process. For anyone who has had any experience with property selling, you should know how many things you have to navigate, from legal requirements to managing practicalities like valuations, viewings, and negotiations.  

These challenges are difficult when you are living in the UK, but they are even more difficult when you are living abroad. Distance definitely makes it harder to oversee essential tasks in person. So everything, like dealing with estate agents, arranging property maintenance, or resolving unexpected issues, is difficult to manage when you are not there. Not to mention that time zone differences and language barriers could also be an issue.  

If you are not familiar with the UK property market, you should definitely get acquainted. You also need to learn about UK tax regulations, inheritance laws, and probate requirements. Despite all these obstacles, you are still able to sell your UK property from overseas if you know what you are doing.  

We are here to help you figure things out. Of course, you can also choose The Property Buying Company, and we will buy your home for cash. You won’t have to deal with estate agents or added expenses because we do it all for you. 

Can I sell an Inherited UK house while living abroad?

Yes! Selling an inherited UK property while living abroad is entirely possible with the right kind of support. Modern technology combined with reliable professionals allows you to handle everything from abroad. You do not need to return to the UK to sell your property.  

One of the first steps would be finding a trustworthy estate agent. Online agents might seem more appealing because of their lower fees, but a local agent usually offers more personalised services. You’ll most likely have a small team managing the sale, conducting viewings, negotiating offers, and providing regular updates. This is very important if you cannot be there yourself.  

However, it is also important that you choose the right solicitor. Some solicitors prefer to embrace technology, which allows them to manage the entire sale digitally. This will include communication via email, electronic document signing, and secure file sharing. This also means that you do not have to meet in person, which works in your favour. 

So, do you want to sell UK property while living abroad? Here is what you need to know.

Should I sell my inherited UK property?

Inheriting property can be a blessing and a burden, especially if you are living abroad and/or managing your own assets. Deciding whether to sell inherited house in the UK will depend on a couple of factors, which include financial considerations, the condition of the inherited property, and your personal circumstances.  

Why you should sell an inherited property  

Selling an inherited property can provide you with a quick financial boost, especially if you have important obligations, like settling inheritance tax or splitting inheritance among beneficiaries. On top of that, maintaining an additional home, especially when you do not live in the same country, can be costly and time-consuming. You’ll have to cover ongoing expenses like insurance, utility bills, council tax, and potential mortgage payments. All of this can easily add up.  

If the inherited house is outdated or requires a lot of renovation to become livable or rentable, you might be better off selling the property. That said, if the property is in a location that is far from where you live, it can be a lot more expensive to manage it remotely than you’d think. So, unless you plan to live there, you should consider selling it.  

If you are interested in selling your property, there are a few ways you can do it. So, let us discuss all the possible ways of selling an inherited home in the UK: 

Property buying companies  

If you value speed and convenience the most, then selling to cash home buyers is the way to go. The Property Buying Company makes it easy for you to sell your property because you do not have to deal with estate agents or incur any additional expenses. Instead, we will give you a cash offer regardless of the state of your property. Plus, we can buy your home in as little as 7 days if necessary. Our sale is guaranteed, so you do not have to worry about any deals falling through, which is usually an issue with traditional property sales.  

Property auctions  

Auctions provide you with a defined timeline, ensuring that your property will not remain on the market for a long time. This option is a good idea for properties that have unique features or need renovation since auctions usually attract cash buyers looking for investment opportunities. However, keep in mind that only around 70% of properties are actually sold at auction. If the sale is unsuccessful, you’ll need a different plan.  

Estate agent sales  

The open market is still one of the most common methods to sell your home and usually offers the best price. If you find a good estate agent, they will handle viewings, negotiations, and feedback. However, this method requires a lot of patience and can take several months to complete. It also requires more investment from you.  

Your choice should depend on your priorities. For example, do you value speed, certainty, or price? Once you have an answer to this, you can consider how you want to sell your inherited property.

Are there tax complications when selling from abroad?

There can always be complications when selling a house, regardless of whether you are doing it abroad or not. However, there are always more complications if you are not fully informed. Let’s discuss and address all the crucial information so you can enjoy a smooth and compliant sale.  

Capital Gains Tax  

If you are a non-UK resident, you will be subject to Capital Gains Tax (CGT) on the profit made from selling residential property in the UK. The gain will be calculated based on the property’s value at the time of inheritance versus the sale price.  

• Rates - For basic taxpayers, the rate is 18%, while for higher or additional-rate taxpayers, it is 28%.  

• Reporting and payment - You need to report and pay CGT to HM Revenue and Customs within 60 days of the property sale. If you miss this deadline, you’ll have to deal with penalties and interest charges.  

Double Taxation  

If your country has its own tax obligations on foreign income, you can actually be taxed twice: once in the UK and once in your country of residence. How can you avoid this? Well, the UK has double taxation agreements with many countries, which will allow you to claim tax relief from CGT paid in the UK.  

Inheritance Tax  

Usually, Inheritance Tax will be paid by the estate before probate is granted. So, there is a chance that you will not encounter any Inheritance Tax liabilities when selling. However, you need to ensure that all IHT obligations are settled during the probate process to avoid any delays.  

Practical Tax Issues  

• Accessing UK Tax Advice - When you sell from abroad, that means that you will have to engage with UK-based tax advisors to ensure compliance.  

• Banking Issues - Receiving sale proceeds into a foreign bank account can trigger reporting requirements in your country of residence.  

It is important that you work with a UK-based solicitor and tax advisor to avoid any issues and deal with such complexities. They are professionals who can ensure that CGT is reported on time. Plus, they will assist with double taxation relief claims and provide clarity on other obligations. When selling inherited property abroad, you need to stay informed and seek professional guidance to avoid any issues.

Is UK inheritance tax payable on overseas property?

Yes, Inheritance Tax can be payable on overseas property. This will depend on the deceased’s domicile status and the overall value of their estate.  

Domicile and Inheritance Tax

Inheritance Tax will be applied differently based on whether the deceased resided in the UK or was considered a non-resident.  

• UK Residents - If the deceased was a UK resident, their worldwide estate, which includes any overseas property, is subject to UK Inheritance Tax. This means that the property located abroad is assessed alongside UK assets for IHT purposes.  

• Non-UK Residents - Those who are not considered UK residents and live outside the country will be liable for inheritance tax on their UK-based assets. Overseas properties are usually excluded from UK IHT. That said, if the individual lived in the UK for 15 of the last 20 years, they are considered UK residents for tax purposes. This makes their entire global estate, including all overseas property, subject to UK IHT.  

Tax Thresholds and Rates  

• The IHT threshold is £325,000, which means that you do not have to pay IHT on the first £325,000 of the estate’s value.  

• The residence nil-rate band offers an additional £175,000 allowance if the deceased’s main home is left directly to descendants.  

• Above the thresholds mentioned, IHT is charged at 40% on the value exceeding the allowances.  

If the country where the overseas property is located also has its own inheritance or estate tax, you might have to pay double taxation. As mentioned, the UK has double taxation agreements with some countries to prevent this, so make sure to check that out beforehand.  

Keep in mind that valuing overseas properties correctly is important. Local tax laws might require you to also have an independent valuation. Legal and administrative processes abroad can complicate the probate process, which is why it is suggested that you consult professionals who are familiar with both UK and local laws of your current residency.

Do I pay Capital Gains Tax if I sell an inherited property in the UK?

You may need to pay Capital Gains Tax if you sell an inherited property in the UK, but this is only if you make a profit on the sale. CGT is payable when you sell an asset for more than its value at the time of inheritance. The gain is calculated as the difference between the sale price of the property and the probate value.  

The rate of CGT depends on your taxable income, which was already mentioned. The amount of gain subject to CGT is also reduced by the Annual Exempt Amount, which is £6,000. This means that the first £6,000 of your gain is tax-free.  

However, if you sell the property for less than or equal to its probate value, you won’t have to pay CGT. You also won’t have to pay if the property was your main residence during your ownership.  

In case CGT applies, you have to report the sale to HM Revenue & Customs and pay tax within 60 days of completing the sale. If you do not know how to calculate tax and what you should pay attention to, make sure that you seek advice from a tax professional or solicitor familiar with proper transactions.

What is the fastest way to sell my inherited property from abroad

There are various ways to sell your property in the UK from abroad. However, if you are seeking the fastest and easiest method, you should consider cash home-buying companies. Not sure where to begin? We are here to assist you. The Property Buying Company has over 200 years of combined property experience. We have been in this business since 2012!

TPBC will cover your fees, including both selling and legal fees. Furthermore, we can purchase your home six times faster than any estate agent could sell it.

However, we can always adjust this timeline to suit your preferences. Getting started is very straightforward. Simply enter your postcode at the top of the site and answer a couple of questions about your property. After that, we will get in touch to discuss the specifics!