Most people who inherit property do so after the death of a parent. It’s a difficult time, made more so by all the paperwork and admin which may feel like a bit of a minefield. If you’ve inherited a property in south west London, this is likely to be a substantial asset – average property prices in Wandsworth borough currently stand at just under £1million, meaning you need to understand the inheritance tax implications. You’ll have decisions to make about the property too – whether to sell, rent out or live there yourself. And if you have siblings or fellow beneficiaries, you’ll need to think this through together. To help you get to grips with the process, we answer the top questions about selling an inherited property.

Where do I start?

You need to begin by locating the will of the person who has died, because this will include all the key information about their wishes for their estate. It will also name the executor – the person appointed to ensure these wishes are carried out, along with the people who will benefit from the estate. If the deceased person did not make a will, the home will pass to close relatives based on intestacy rules. Once you have consulted the will you can begin the process of applying for probate.

What is probate and how do I apply?

Applying for probate is the legal term for the process of asking to deal with someone’s assets after they die. You may decide to appoint a solicitor to manage your probate application, or you can do it online using the gov.uk website. The fee is currently £273. Before you can apply for probate, you must estimate the value of the estate to work out whether there is inheritance tax to pay.

Do I need to pay inheritance tax on inherited property?

When someone dies, inheritance tax at a rate of 40% may need to be paid on the value of their estate above certain thresholds.

– If the estate is inherited by a spouse or civil partner there is no inheritance tax to pay.

– if a child or grandchild is the beneficiary, the threshold is £500,000.

– In other circumstances, the threshold is £325,000.

– Unused thresholds can be passed from one spouse to another.

How do I calculate the inheritance tax due on an inherited property?

To work out how much inheritance tax is owed, you should add up the value all the deceased person’s assets including their home, savings, jewellery, furniture, death benefits and cars. Read more about inheritance tax on the gov.uk website.

You need to include the current value of the property so you should seek three estate agent valuations.

How soon as you sell inherited property?

While you can market the property straight away, you can’t exchange contracts until you have been granted probate – so you or your agent needs to make the position clear to interested buyers. The average time probate takes in the UK is currently around four months.

Do I need to update an inherited property before I sell?

Staging a property to sell will always show it off to its best and help you attract buyers and higher offers. In a desirable location, such as south west London, you may not need to carry out a full-scale refurb to entice buyers. It is worth discussing this with your estate agent first. If the home is quite dated, think about repainting it and removing old carpets and fittings as well as sprucing put the exterior to give it kerb appeal. You will need to remove all belongings from the home before you sell. A clearance company can do this for you, if the task feels too big to manage.

What happens when selling an inherited property with a mortgage?

If there is still a loan on the property, and no life insurance policy to pay it off, your first job should be to talk to your mortgage lender to find out about the terms of the mortgage. Some lenders may agree to freeze payments until probate is granted. Once you sell the property, will pay off the mortgage and keep the balance.

What happens if I inherit a property with siblings and one of them doesn’t want to sell?

When you and your siblings inherit jointly, you’ll need to come to an agreement about what to do with the property. If for example, one sibling wishes to live in the home, they will need to buy the others out. If you wish to sell but another sibling doesn’t, things can become difficult and you should take legal advice. If you can’t agree, it is possible to force a sale by getting a county court judgement.

If I inherit a property then sell, is it taxable?

When you inherit the property, you will pay inheritance tax. If you hold on to it for any length of time, and it has risen in value by the time you sell, capital gains tax may be payable. You may be fully or partially exempt if you lived in the property as your main residence – get advice from an accountant about this.

If you’re thinking of selling an inherited property in Wandsworth, Tooting or Balham, talk to us. With our knowledge of the local market and experience of selling inherited homes in this area, we can advise you about the best way forward. Book a free market appraisal of the property today.