Yes, you can sell a house during probate. But if a person’s estate includes any property, you cannot complete the sale until you have your grant of probate.
In this post we’ll outline the steps you’ll need to take if you want to sell a house during probate, including the inheritance tax implications.
For more information, call us on 0208 8290 9086 or email personal@anthonyjones.com.
What is Probate?
Probate is the legal right to manage a person’s estate after they pass away. A grant of probate allows the will’s executor to settle all of the deceased’s debts, and ensure that all of the will’s beneficiaries receive their inheritance.
We have a number of guides to what probate is, and how it works:
- Probate timeline – what are the steps of the probate process?
- A guide to probate costs and fees.
- What documents do you need for probate?
- Probate and property – your responsibilities.
Property and Probate – Whose Property Is It?
If a person owned property, they may specify who inherits their property in their will. Alternatively, ownership of the property may be transferred to other individuals named on the title deed.
If the individual passed away without leaving a will, then there are certain steps you’ll need to take to give you the legal right to manage the property. You will also have to take additional steps if it transpired that the person passed away without updating certain legal documents.
In any case, whoever inherits the deceased’s home may wish to sell the property. But do they have to wait until probate is complete before they start the sale?
Selling a House During Probate: What To Do
First Things First – Inheritance Tax
If the deceased’s estate is worth more than £325,000, then you may need to pay inheritance tax.
The inheritance tax rate is currently 40% on anything over the value of £325,000. When it comes to property, there are certain factors that may help to reduce the amount of inheritance tax you need to pay.
If you inherit a house from your spouse or civil partner, you’ll be exempt outright from paying inheritance tax. You may be eligible to pay less inheritance tax if you’re a direct descendent of the deceased, such as a child or a grandchild, and you’ve inherited a “main residence”.
There’s a “main residence nil-rate band”. At the moment, this is £175,000, which is added to the main £325,000 nil-rate band. This means that you could, in theory, inherit a property worth up to £500,000 without paying any inheritance tax.
But in any case, you need to include a completed inheritance tax return as part of the probate process. So before you do anything else with the will or the property, you’ll need sort out the inheritance tax.
What is a Probate Sale?
You need a completed inheritance tax return before you apply for a grant of probate, and you’ll need a grant of probate before you can manage the deceased’s property. However, there’s no need to actually pay the inheritance tax before you apply for probate. All you need is the completed return, stating how much is owed.
If you’re facing a hefty inheritance tax bill, you may decide to sell the property in order to cover it. This is known as a probate sale.
Can I Sell A House Before I Get a Grant of Probate?
No, you will not be able to complete the sale without your grant of probate. However, you can list the property for sale almost immediately. You can also arrange for viewings, and even accept offers.
But to reiterate, you cannot complete the sale until you get your probate. As the whole probate process can take months, it’s important to bear this in mind before you agree on any completion dates with potential buyers.
Be sure to tell any buyers that you’re going through probate, too. They may withdraw from the sale if they encounter any unexpected delays.
How to Sell a Home During Probate – In Summary
- If you inherit a house and you wish to sell it, you can put it on the market immediately. You can also accept an offer on the home.
- However, you will not be able to complete the sale without a grant of probate.
- You will have to include a completed inheritance tax return as part of your probate application.
- So, the first step is to sort out the inheritance tax. Even if you have nothing to pay, you’ll still need a completed return before you proceed.
- The second step is to apply for a grant of probate.
- Once you have a grant of probate, you can complete the sale on the property. There’s no need to wait until the rest of the estate is settled. This means you can sell a house before probate is “complete”.
We Can Help You Protect Your Property Throughout Probate
Mark Stevenson at Anthony Jones says:
“At Anthony Jones, we know how complex the probate process can get, particularly if property is involved. We also understand that the period following a loss is a difficult time for everyone. Too much red tape will only make things harder.
“But you should still take steps to protect your property throughout the probate process – especially since most home insurance policies will only cover occupied homes.
“That’s why we’re committed to helping you protect your assets through probate and beyond, so you’ll at least have one less thing to worry about.
“Come and talk to us, and we will help you understand exactly what cover you need, and how long you need it for.”
For more information on how we can help you protect your property through the probate process, call us on 0208 8290 9086 or email personal@anthonyjones.com.
