What Are The Tax Implications Of Selling An Inherited House?
We always recommend that you seek expert legal advice before you embark on the sale of your property as you may be liable to pay inheritance tax or capital gains tax. A quick call with a solicitor can help you figure out any fees you are liable for and when. The sooner you do this, the sooner you can move on and ensure you are not liable for any overdue charges.
As well as the tax implications of selling an inherited house, there may be other costs you need to consider:
You may need to get in touch with the mortgage company to find out whether the mortgage on the inherited property is fully paid or whether payment is still due. The provider may have special terms to adhere to in a situation of bereavement and inherited properties.
The inherited property will still be liable for council tax, even if it is unoccupied. Again, it’s always worth getting in touch with your local council to find out if there are discounts available to you if you find yourself with an empty property.
The amount of insurance you are liable for depends on your plans for the inherited property. You have the choice of selling, buying or renting the property. You will still need to take out insurance if the house is unoccupied for 30 days or more.
Find out about the latest government information on taxes on selling an inherited house.
You may have to pay Inheritance Tax (also known as IHT) on the deceased's estate. Inheritance tax includes a tax on property, possessions, and money.
You do not usually need to pay Inheritance tax if you meet the following criteria:
- The value of the person's estate is below the Nill Rate Band (NRB) of £325,000
- If the estate above the threshold is left to a spouse or civil partner
- Or the estate is left to an exempt beneficiary, for instance, a charity.
However, if the value of the person's estate exceeds the Nill Rate Band, the estate above the threshold may be liable to pay inheritance tax at 40 %.
If you do not pay the Inheritance tax within 6 months, you may be charged interest by HMRC.
The Money Advice Service has more useful information about tax when selling an inherited property.
Selling An Inherited House – Capital Gains Tax
If the inherited property goes up in price before it is sold, it may be sold for more money than it was worth at the time of inheritance. This is known as being liable for capital gains tax. In this instance, the amount of tax you are liable to pay on capital gains depends on many factors, including the rate of Income Tax you pay.
Your solicitor or financial advisor will be able to guide you through this, however a quick house sale will help you to avoid capital gains tax.
HMRC also has a handy calculator to work out how much Capital Gains Tax you are liable for.
If you decide to rent the inherited property, you will need to pay Income Tax on the income you earn from rental.
Read more about how long does it take to sell a house through probate
Sell Your House With 321 Move
There are many reasons why a quick and simple sale can benefit you, especially in a sudden or distressing situation. Our friendly, expert team are passionate about helping you navigate life’s biggest moments with care.
We purchase your inherited property using our own cash, so that you can get the best price for your property. You receive 100% of our final offer price and don’t contribute to any fees associated with the selling process, unlike traditional estate agents.
- Guaranteed offer in 24 hours
- No fees, no chain
- Proven track record in inherited property purchasing
- Private and discreet
- Timescale to suit you
- All property types, in any condition
- Minimise and avoid capital gains tax
The cash can be in your bank within 14 days. It’s quick, simple and can minimise the stress of a traditional house sale with an estate agent. Any home improvements and fees are taken care of so that you can begin to move on from any emotional attachments from the inherited property.
Our team are on hand to provide you with an offer within 24 hours. This allows you to start the selling process as soon as possible. It also helps you to decide whether you want to go ahead with the offer, knowing the full cash amount we can offer for your house.
Are You Happy With Your Offer?
If you’re happy with your offer, we will exchange contracts that allow us to legally buy your inherited house.
You can then arrange to hand over the property at a time and date that suits you.
Our team prides itself on being open, honest and experienced in the property sector. We know that inheriting a house and selling it can be a busy or stressful time, but we are here to help you every step of the way. Got a question for us? Check out our frequently asked questions.