Selling an Inherited House: The Complete UK Guide
From probate to completion, here's everything you need to know about selling an inherited property in the UK - including tax, legal steps and your options.
Selling an inherited house comes with its own set of legal and emotional considerations, on top of everything involved in a normal sale. You may be dealing with probate, tax, and possibly other beneficiaries, all while grieving a loss.
This guide walks through the whole process, from getting legal authority to sell, through to tax and what to do if things get complicated.
Can You Sell an Inherited Property?
Yes, you can sell an inherited property, but you’ll usually need to obtain legal authority to do so first. This normally means getting probate or letters of administration before a sale can complete.
What Counts as Inherited Property?
Inherited property is any property you receive as a result of someone’s death, whether through a will or under the rules of intestacy. This can include a share of a property alongside other beneficiaries.
What if There’s No Will? Intestacy Rules Explained
If someone dies without a will, their estate is distributed according to intestacy rules, which set out a fixed order of who inherits. A spouse or civil partner and children are usually first in line, though the exact split depends on the value of the estate.
How to Get Legal Authority to Sell
Before you can sell, you’ll usually need to prove you have the legal right to act on behalf of the estate.
What is Probate and Do You Need It?
Probate is the legal process of confirming a person’s will and giving the executor authority to deal with the estate. You’ll usually need it before a property in the deceased’s sole name can be sold.
Grant of Probate vs Letters of Administration
A grant of probate applies when there’s a valid will naming an executor. Letters of administration apply when there’s no will, or no executor able to act, and someone else applies to administer the estate instead.
How Long Does Probate Take?
Probate can take anywhere from a few months to over a year, depending on the complexity of the estate. Estates with multiple assets, unclear wills or disputes between beneficiaries tend to take longer.
Can You Sell a House Before Probate is Granted?
You can market the property and even accept an offer before probate comes through, but you generally cannot complete the sale until probate is granted. Being upfront with buyers about this timeline can help manage expectations.
What to Do Before You Put the Property on the Market
There’s often a bit of groundwork to do before you’re ready to list.
Getting a Valuation for Probate Purposes
You’ll usually need a formal valuation of the property for probate and inheritance tax purposes. This is separate from any valuation your estate agent provides ahead of a sale.
Insuring a Vacant Inherited Property
Standard home insurance often doesn’t cover an empty property, so it’s worth arranging specialist unoccupied property insurance while the sale is arranged.
Clearing and Preparing the Property for Sale
Clearing the property and carrying out basic maintenance can help it present well to buyers. A well-presented home can attract more interest, though how much difference this makes depends on the local market.
Dealing with an Outstanding Mortgage on an Inherited Property
If the property still has a mortgage, this will usually need to be paid off from the sale proceeds, or the estate will need to keep up repayments until the sale completes. It’s worth contacting the lender early to understand your options.
How to Sell an Inherited House
Once you have legal authority to sell, the process is broadly similar to a standard sale.
Choosing an Estate Agent
Look for an agent with experience of probate sales, as they’ll understand the added steps involved and can help set realistic expectations on timing.
Setting the Asking Price
Pricing an inherited property is much the same as any other sale: it should reflect the local market, the property’s condition and demand from buyers in the area.
Selling at Auction vs Open Market
Auctions can suit inherited properties that need work or where a quick, certain sale is preferred. Selling on the open market may achieve a higher price, but can take longer.
Selling When There Are Multiple Beneficiaries
If the property is inherited by more than one person, all beneficiaries usually need to agree on the sale, the price and how proceeds are divided. It’s worth agreeing this in writing early on to avoid disagreements later.
Tax on Selling an Inherited Property
There are two main taxes to think about when selling an inherited house: inheritance tax and capital gains tax. If you’re weighing up the wider tax picture, our guide on do you pay tax when you sell your house covers how this applies more generally.
Inheritance Tax (IHT)
Inheritance tax is charged on the value of the estate before it’s distributed to beneficiaries, not on the sale itself. It’s usually paid by the estate before assets are passed on.
The IHT Threshold and Nil Rate Band
Every estate has a nil rate band of £325,000, below which no inheritance tax is due. Anything above this is typically taxed at 40%, unless other reliefs or exemptions apply.
The Residence Nil Rate Band
If the deceased’s main home is left to children or grandchildren, an additional residence nil rate band of £175,000 may apply, potentially raising the tax-free threshold to £500,000 for an individual.
Who Pays IHT and When?
Inheritance tax is usually paid by the executor from the estate’s funds, often before probate is granted. This can sometimes mean part of the tax needs to be paid before the property itself is sold.
Capital Gains Tax (CGT) on Inherited Property
CGT can apply if the property increases in value between the date of death and the date you sell it. It’s worth reading what you should know about capital gains tax alongside the specifics below, as the general rules still apply.
How CGT is Calculated on an Inherited Property
The starting point for CGT purposes is the property’s market value at the date of death, not what the deceased originally paid for it. Any increase in value between then and the sale may be liable to CGT.
Current CGT Rates for Residential Property
For UK residential property, CGT is currently charged at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers, based on rates that have applied since October 2024.
The 60-Day Reporting Rule
If CGT is due, it generally needs to be reported and paid to HMRC within 60 days of completion. Missing this deadline can lead to penalties and interest, so it’s worth flagging early with your solicitor or accountant.
What if the Property Has Fallen in Value? Capital Losses Explained
If the property is worth less when you sell than it was at the date of death, you may have a capital loss. This can potentially be offset against other gains, so it’s worth keeping records either way.
Private Residence Relief: Living in the Property Before Selling
If you move into the inherited property and make it your main home, you may qualify for private residence relief on some or all of the gain for the period you lived there. The rules here can be nuanced, so it’s worth getting advice specific to your situation.
Stamp Duty Considerations
Stamp duty works differently for inheriting a property than for buying one.
Do You Pay Stamp Duty When Inheriting a Property?
No, you don’t pay stamp duty simply for inheriting a property, as no purchase has taken place.
When Stamp Duty Could Apply After Inheritance
Stamp duty may become relevant later if you go on to buy another property while still owning the inherited one, as this can affect which rate applies, including any surcharge for additional properties.
How to Reduce Your Tax Liability
There are some legitimate ways to manage the tax due on an inherited property, though what applies will depend on your circumstances.
Timing the Sale Across Tax Years
Selling across different tax years can allow you to use more than one annual CGT exempt amount, which may reduce your overall tax bill.
Gifting to a Spouse or Civil Partner
Transfers between spouses or civil partners are usually free of CGT, which can sometimes help make better use of both people’s allowances before a sale.
Using Your Annual CGT Allowance
Every individual has an annual exempt amount for capital gains, currently £3,000, which is deducted from any taxable gain before tax is worked out.
Offsetting Capital Losses
If you’ve made capital losses elsewhere, these can often be offset against a gain on the inherited property, which may reduce the amount of tax due.
Should You Sell, Rent or Keep the Inherited Property?
Selling isn’t always the only option, and it’s worth weighing up the alternatives.
Pros and Cons of Selling
Selling gives you a clean break and immediate access to funds, but it also means giving up any future increase in the property’s value.
Renting Out an Inherited Property
Renting can provide an income, but comes with landlord responsibilities and may affect your future CGT position if the property later increases in value.
Gifting the Property
You can gift your share of an inherited property to another beneficiary or family member, though this can have its own tax implications worth checking beforehand. If you’re thinking about keeping it within the family at a reduced price, Can I sell my house to my kids explains what’s involved.
How Living in the Property Affects Your Tax Position
Moving in yourself can reduce future CGT liability through private residence relief, but it’s a decision that should factor in your own housing needs, not just the tax position.
Selling an Inherited Property When There Are Complications
Not every inherited property sale is straightforward.
The Property Has Sitting Tenants
If the property already has tenants in place, you’ll need to sell subject to their tenancy rights, which can affect both the price and the pool of interested buyers.
The Property Needs Significant Work
Properties that need renovation may suit cash buyers or auction sales better than the open market, particularly if a mortgage lender would be reluctant to lend against it.
Disputes Between Beneficiaries
If beneficiaries can’t agree on selling, the price, or how to divide proceeds, it’s worth seeking legal advice early, as unresolved disputes can significantly delay a sale.
Ready to Sell an Inherited Property?
Selling a house you’ve inherited can feel overwhelming, especially while dealing with probate and family matters at the same time. Getting the right support early on can make the whole process easier to manage.
If you’re ready to move forward, sell your house quickly with Purplebricks, or book your free valuation to get started.
Frequently Asked Questions
You may pay capital gains tax if the property has increased in value since the date of death, though inheritance tax is usually settled separately by the estate.
You’ll typically need probate or letters of administration first, then the sale proceeds much like any other, through an estate agent and conveyancer.
This depends on your financial situation, whether you want an ongoing landlord role, and how the other beneficiaries feel. There’s no single right answer.
This often refers to the two-year window some reliefs and elections apply within, such as varying how an estate is distributed. It’s worth checking the specific relief with an adviser, as rules can be detailed.
In most cases, yes, if the property was solely in the deceased’s name. Jointly owned property that passes automatically to a surviving owner may not require probate.
You can usually market it and agree a sale, but completion will typically need to wait until probate has been granted.
It varies, but factor in both probate timescales and the usual conveyancing process, which together can take several months.
Ideally, this is resolved through discussion, but if not, legal advice may be needed to break the deadlock.
You may reduce your CGT liability through private residence relief for the period you lived there, though the exact calculation depends on your circumstances.
While not a strict legal requirement, most people use a solicitor or conveyancer given the added legal steps involved, such as dealing with probate.
Yes, this is possible, though it’s worth considering how it may affect your future tax position and whether you want the responsibilities of being a landlord.
Any outstanding mortgage generally needs to be repaid, either from the estate or from the eventual sale proceeds, so it’s worth contacting the lender as soon as possible.