The loss of a loved one is an emotionally challenging time for families.

Amidst the grief, the probate process adds an additional layer of complexity, particularly when it comes to dealing with property.

In this article, we will explore the intricacies of selling property during the probate process, offering helpful tips and guidance to ensure a smooth and hassle-free experience.

Understanding probate

Probate is the legal procedure by which a deceased person’s estate is administered and distributed according to their Will or the intestacy rules, if no valid Will exists.

It’s essential to understand that the sale of the property can’t take place, unless your name is already on the title deeds, until the probate process has been initiated and the executor has obtained a Grant of Probate, which gives them the authority to act on behalf of the estate.

Valuing the property

As part of the probate process, all assets must be properly valued, which includes any properties.

This valuation must be carried out by a qualified and experienced surveyor, as it will be used to determine the property’s market value, which in turn affects the Inheritance Tax (IHT) liabilities for the estate.

It’s crucial to get an accurate valuation, as an undervalued property can lead to penalties and an overvalued property can result in paying more IHT than necessary.

At Rotherham Taylor, we can liaise with the appropriate parties on behalf of the Executor to get this underway.

Calculating whether IHT is due

Once the property and all other assets have been valued, you must inform HM Revenue & Customs (HMRC) about the total value of the estate, including the property.

Depending on the estate’s total value and applicable exemptions, IHT may be due.

In most cases, if the estate is valued above the Nil-Rate Band threshold of £325,000, the standard rate of 40 per cent IHT will be due, unless other reliefs are applied.

The main residence nil-rate band allows for an additional £175,000 tax-free allowance for direct descendants that are inheriting a property.

If the entire estate, including the property, is left to a spouse or civil partner, there will be no IHT due for the surviving partner.

Any unused tax-free allowance will also be passed on to the spouse, therefore IHT will only be incurred on the estate following the death of the spouse/civil partner.

As IHT must be paid within six months from the death, whether this is paid before or after the property sale is dependent on how long the process takes.

If the executor or beneficiary does sell the property and the amount the property is sold for is more than the IHT value, Capital Gains Tax (CGT) may be due.

Marketing the property for sale

After the amount of IHT due has been calculated, it is time to put the property on the market.

Once the sale has been finalised, the proceeds can be used to settle any outstanding debts and pay any IHT that is due.

After the necessary payments have been made, the remaining balance can be split between the beneficiaries according to the Will.

Selling property during the probate process can be a daunting task, especially when dealing with the emotional stress of losing a loved one.

As licenced providers of probate services, we can support you and give you peace of mind that you are fulfilling your obligations.

Get in touch for support with the probate process.