Inheriting a property: your questions answered

Whether expected or not, finding yourself the owner of a property after someone’s death is a sensitive subject. Here we answer the most frequently asked questions by someone who has inherited a home.

Q. I’m named in the will so is probate necessary?
A. Unless a property is passed on to a joint tenant, probate is almost always required. Although the will sets out who inherits what, the probate grants the legal right to an executor to deal with someone’s property, as well as their money and possessions, after they die.

Q. More than one person has inherited the property, what happens next?
A. It’s very common for siblings to jointly inherit their parent’s property, with multiple new owners responsible for the future plan. All the owners need to consent for it to happen. One way to gain sole ownership is to buy the co-owners out.

Q. Can I move into a property I’ve inherited?
A. If you are the sole owner and the property is empty, there is nothing stopping you from using the inherited property as your place of residence. If you have inherited a buy-to-let with tenants in situ, you’ll need to wait for their tenancy to end before you move in, or give them the pre-set notice period if there are valid reasons to ask them to leave.

Q. Is there anything stopping me from selling the property?
A. If you don’t want to move into the inherited property or rent it out, you can sell it. It’s a straightforward process if you’re the sole owner but everyone needs to agree to a sale if the property is jointly owned.

Q. Are there any tax implications attached to an inherited property?
A. Tax is a big consideration, especially if the deceased was in debt or faces a large inheritance tax bill. Sometimes the only way for beneficiaries to balance the books is by selling the property asset. It’s also worth remembering that when an inherited property is sold, there may be income tax to pay upon completion or a mortgage to settle.

Q. What happens about stamp duty when I own more than one home?
A. This is another tax consideration. If you retain an inherited property and rent it out, but go on to buy another house to live in, you will be classed by the Government as an owner of additional properties. All homes bought in addition to the inherited property will incur an extra 3% levy on top of basic stamp duty rates.

Q. Can I rent out an inherited property?
A. If you don’t want to sell a property you’ve inherited, you could become a landlord and advertise the property to tenants. You’ll be able to keep the property in the family and always have somewhere to move into in the future but being a landlord also comes with its own tax implications. As well as income tax to pay, any profit made when selling the inherited property in the future may be subject to capital gains tax.

Q. I’ve inherited a buy-to-let with tenants, can I evict them?
A. Inheriting a tenanted dwelling is slightly different as you’re gaining residents as well as a property. Depending on the tenancy agreement in place, the landlord has to give an average of two months’ notice to regain their property, or they have to wait until the fixed-term tenancy ends.

Q. Could I take over the buy-to-let?
A. If you like the idea of an inherited property with tenants in place, there’s nothing stopping you from taking over as the landlord. You’ll need advice from a letting agent and a tax specialist but renting out can be a rewarding way of keeping ownership of an inherited property.

Q. I’ve never bought a property but I’ve just inherited one – how will I be affected?
A. Your first-time buyer status will likely be scuppered if you inherit a property as you’ll automatically be considered a homeowner – even though you’ve never been through the buying process. Your access to discounted stamp duty rates, benefits attached to a LISA (lifetime ISA) and ability to use Help to Buy may all be compromised, even if you never live in the inherited property and sell it on immediately.

Q. So can I refuse an inherited property?
A. You can refuse to inherit a property and the technical term for this is ‘disclaiming’ it. We do recommend taking legal advice before you disclaim any inherited asset, especially if you have never owned a property before.

We are here to sensitively advise families and individuals who are going through the probate process, so please get in touch to discuss your options.

Whether expected or not, finding yourself the owner of a property after someone’s death is a sensitive subject. Here we answer the most frequently asked questions by someone who has inherited a home.

Q. I’m named in the will so is probate necessary?
A. Unless a property is passed on to a joint tenant, probate is almost always required. Although the will sets out who inherits what, the probate grants the legal right to an executor to deal with someone’s property, as well as their money and possessions, after they die.

Q. More than one person has inherited the property, what happens next?
A. It’s very common for siblings to jointly inherit their parent’s property, with multiple new owners responsible for the future plan. All the owners need to consent for it to happen. One way to gain sole ownership is to buy the co-owners out.

Q. Can I move into a property I’ve inherited?
A. If you are the sole owner and the property is empty, there is nothing stopping you from using the inherited property as your place of residence. If you have inherited a buy-to-let with tenants in situ, you’ll need to wait for their tenancy to end before you move in, or give them the pre-set notice period if there are valid reasons to ask them to leave.

Q. Is there anything stopping me from selling the property?
A. If you don’t want to move into the inherited property or rent it out, you can sell it. It’s a straightforward process if you’re the sole owner but everyone needs to agree to a sale if the property is jointly owned.

Q. Are there any tax implications attached to an inherited property?
A. Tax is a big consideration, especially if the deceased was in debt or faces a large inheritance tax bill. Sometimes the only way for beneficiaries to balance the books is by selling the property asset. It’s also worth remembering that when an inherited property is sold, there may be income tax to pay upon completion or a mortgage to settle.

Q. What happens about stamp duty when I own more than one home?
A. This is another tax consideration. If you retain an inherited property and rent it out, but go on to buy another house to live in, you will be classed by the Government as an owner of additional properties. All homes bought in addition to the inherited property will incur an extra 3% levy on top of basic stamp duty rates.

Q. Can I rent out an inherited property?
A. If you don’t want to sell a property you’ve inherited, you could become a landlord and advertise the property to tenants. You’ll be able to keep the property in the family and always have somewhere to move into in the future but being a landlord also comes with its own tax implications. As well as income tax to pay, any profit made when selling the inherited property in the future may be subject to capital gains tax.

Q. I’ve inherited a buy-to-let with tenants, can I evict them?
A. Inheriting a tenanted dwelling is slightly different as you’re gaining residents as well as a property. Depending on the tenancy agreement in place, the landlord has to give an average of two months’ notice to regain their property, or they have to wait until the fixed-term tenancy ends.

Q. Could I take over the buy-to-let?
A. If you like the idea of an inherited property with tenants in place, there’s nothing stopping you from taking over as the landlord. You’ll need advice from a letting agent and a tax specialist but renting out can be a rewarding way of keeping ownership of an inherited property.

Q. I’ve never bought a property but I’ve just inherited one – how will I be affected?
A. Your first-time buyer status will likely be scuppered if you inherit a property as you’ll automatically be considered a homeowner – even though you’ve never been through the buying process. Your access to discounted stamp duty rates, benefits attached to a LISA (lifetime ISA) and ability to use Help to Buy may all be compromised, even if you never live in the inherited property and sell it on immediately.

Q. So can I refuse an inherited property?
A. You can refuse to inherit a property and the technical term for this is ‘disclaiming’ it. We do recommend taking legal advice before you disclaim any inherited asset, especially if you have never owned a property before.

We are here to sensitively advise families and individuals who are going through the probate process, so please get in touch to discuss your options.