When you inherit a commercial property in the UK, selling it involves dealing with a complex process of probate, tax considerations, market analysis, and logistical challenges-all while potentially managing disputes between multiple beneficiaries and coping with the emotional impact of your loss.
The UK commercial property market is currently showing strong performance, making it potentially an advantageous time to sell inherited commercial assets. According to recent data from CBRE, the market delivered total returns of 7.7% in 2024, higher than previous years and above the average annual return of 7.2% recorded since 2000. With Colliers predicting commercial property investment volumes to reach between £45bn and £50bn in 2025 and potential returns hitting double digits (11%) in the coming year, inheritors may find this an opportune moment to consider selling.
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First Steps After Inheriting Commercial Property
Inheriting commercial real estate often feels overwhelming, particularly when you’re simultaneously dealing with grief. Before making any decisions about selling, it’s essential to understand what you’ve inherited and your legal position.
Your initial priorities should include:
Locating and reviewing the deceased’s will to confirm your inheritance rights
Registering the death and obtaining a death certificate
Applying for probate (a legal requirement before selling)
Securing the property and arranging appropriate insurance coverage
Commissioning a professional valuation of the property
Reviewing any existing leases, tenants, or business arrangements
Understanding tax implications (inheritance tax and potential capital gains tax)
Consulting with legal and tax professionals who specialise in commercial property
These preliminary steps provide clarity about your inheritance and help inform your decision about whether to keep or sell the commercial property.
Understanding the Probate Process for Commercial Property Sale
You cannot complete a sale of inherited commercial property until probate has been granted. This legal process confirms the executor’s authority to deal with the deceased’s estate, including transferring property ownership.
The key stages in the probate process for commercial property include:
Register the death and obtain the death certificate
Locate the will to identify the executor and beneficiaries
Get a professional valuation of the commercial property
Review the property deeds for any restrictions
Calculate and pay any inheritance tax due
Apply for and secure the Grant of Probate
Register your ownership with the Land Registry
Proceed with marketing and selling the property
Elizabeth from Ripon found herself completely overwhelmed after inheriting her father’s industrial warehouse. “The property needed significant repairs, there were complicated lease arrangements with existing tenants, and I had absolutely no experience with commercial property,” she explains. “After struggling for months trying to handle the probate process while maintaining the property, I contacted Property Saviour. They not only provided clear guidance through the legal complexities but offered a guaranteed purchase once probate was granted, removing all the stress of finding a buyer and managing repairs.”
Tax Implications When Selling Inherited Commercial Property
Understanding the tax landscape is crucial when selling inherited commercial property in the UK. Several tax considerations could significantly impact your financial position.
Inheritance Tax Considerations
Inheritance Tax (IHT) applies to commercial property at a rate of 40% on any amount exceeding the nil-rate band threshold (currently £325,000). However, commercial properties may qualify for Business Property Relief at either 50% or 100%, depending on how the property was used.
To qualify for Business Property Relief:
The property must be used for trading purposes
It cannot be primarily held as an investment asset
The relief only applies if the property was operated as a business by the deceased
If the property was simply managed to generate rental income, Business Property Relief won’t be available, and the full value may be subject to inheritance tax.
Capital Gains Tax When Selling
When you sell inherited commercial property, Capital Gains Tax (CGT) may apply if the property has increased in value between the date of death (probate valuation) and the date of sale. The following table outlines the current CGT rates for commercial property sales:
| Taxpayer Status | CGT Rate on Commercial Property | Notes |
|---|---|---|
| Basic rate taxpayer | 10% on gains | Applies if total taxable income falls within basic rate band |
| Higher/additional rate taxpayer | 20% on gains | Applies to higher earners |
| Companies | Corporation Tax rate (19%) | If property held through a company structure |
| With Business Asset Disposal Relief | 10% | Subject to lifetime limit, specific conditions apply |
This table provides current tax rates, but your specific situation may be affected by various factors, including your total taxable income, available allowances, and whether the property qualifies for specific reliefs. The important point to remember is that CGT is only calculated on the increase in value since the date of death, not since the original purchase by the deceased.
Should You Keep or Sell Inherited Commercial Property?
Deciding whether to keep or sell inherited commercial property requires careful consideration of several factors. While commercial property can provide steady rental income and potential capital appreciation, it also comes with significant responsibilities and potential challenges.
When weighing your options, consider these insights borrowed from online forums:
“My brother and I inherited a small retail unit from our father. He was convinced we should keep it for the rental income, but I had no interest in becoming a landlord. After six months of disagreements, we finally sold it and split the proceeds. Looking back, I wish we’d made this decision immediately rather than letting it cause family tension.”
At Property Saviour, we’ve seen many similar situations where inherited commercial property creates conflict among beneficiaries with different priorities. Our experience shows that a quick, fair resolution often preserves relationships better than prolonged disagreement about property management.
How to Sell Commercial Property You’ve Inherited?
Selling inherited commercial property involves several key steps to ensure you meet all legal requirements and maximise your return. The process can be more complex than selling residential property due to additional regulations and considerations.
Here’s a comprehensive approach to selling your inherited commercial property:
Ensure probate is complete: You must have the Grant of Probate before completing any sale.
Register your ownership: Update the Land Registry to reflect your ownership of the property.
Conduct thorough due diligence: Gather all relevant documents, including lease agreements, service charge records, and maintenance histories.
Commission professional surveys: A structural survey and environmental assessment can identify any issues that might affect the sale.
Obtain an Energy Performance Certificate (EPC): This is legally required for commercial properties being sold.
Set a realistic asking price: Consider getting multiple valuations from commercial property specialists.
Choose your selling method: Decide between estate agents, auction, or direct sale to a property buying company.
Prepare for marketing: Professional photographs, floor plans, and detailed information about income potential will attract serious buyers.
Handle viewings and negotiations: Be prepared to answer detailed questions about the property’s performance and condition.
Engage a solicitor: Commercial property transactions require specialised legal expertise.
While this process can be time-consuming and complex, working with experienced professionals can significantly streamline the journey from inheritance to successful sale.
How Is a Commercial Property Valued for Probate?
For probate purposes, commercial property must be valued at its open market value on the date of death. This valuation differs from a standard market appraisal because it must represent a specific historical point rather than current market conditions.
HMRC recommends obtaining professional valuations from qualified commercial surveyors, particularly for estates likely to attract inheritance tax. The valuation should:
Be specific to the date of death
Consider the property’s condition at that time
Take into account any tenancies or encumbrances
Be supported by comparable evidence
Provide a clear explanation of the methodology used
For larger commercial properties or estates approaching the inheritance tax threshold, it’s advisable to instruct a RICS-registered valuer who specialises in commercial property. Their formal “Red Book” valuation will provide the strongest defence if HMRC questions the property’s value.
How to Handle Disputes When Multiple Beneficiaries Inherit Commercial Property?
When commercial property is inherited by multiple beneficiaries, conflicting priorities can create significant challenges. Some may want to sell immediately, while others might prefer to keep the property as an investment or for sentimental reasons.
Based on our experience at Property Saviour, these disputes often intensify when beneficiaries have different financial needs or emotional attachments to the property. We’ve helped numerous families work through these sensitive situations by providing a guaranteed purchase option that gives everyone certainty and allows for fair distribution of proceeds.
If you’re facing inheritance disputes over commercial property, our compassionate team understands the delicate balance between honouring emotional attachments and addressing practical financial needs. We approach each situation with genuine empathy, recognising that inheritance decisions come during an already difficult time.
Managing Vacant Commercial Property During the Sale Process
Empty commercial properties present significant challenges and costs while you’re going through the selling process. According to data from search results, some areas have seen vacancy rates as high as 14.8% in recent quarters.
Vacant commercial properties require careful management to:
Prevent deterioration that could affect value
Avoid security issues, including theft and vandalism
Comply with insurance requirements
Manage ongoing business rates, which can be substantial
Property insurance providers typically have strict requirements for vacant commercial buildings, including regular inspections, maintained security systems, and potentially draining water systems during winter months. Failure to comply with these requirements could invalidate your insurance if problems occur.
If your inherited commercial property is vacant while you’re arranging the sale, consider whether the ongoing costs and responsibilities are worth the potential benefit of a slightly higher sale price through traditional marketing channels. Many inheritors find that a guaranteed sale, even at a slightly reduced price, provides better overall value when all costs and risks are considered.
Making the Right Decision for Your Situation
Inheriting commercial property presents both opportunities and challenges. While commercial property can be a valuable asset, it also comes with significant responsibilities that not all inheritors are prepared to manage. Part of UK commercial property market is currently showing strong performance, with recent data indicating positive returns and growth prospects for 2025.
The most important factor in your decision-making process should be your individual circumstances, including:
Your financial situation and need for immediate capital
Your experience with property management
Your willingness to take on the responsibilities of a commercial landlord
Your time horizon for investment
The specific type and location of the commercial property
The condition of the property and potential need for investment
At Property Saviour, we understand that inherited property decisions are never purely financial-they come during a time of emotional transition and often involve complex family dynamics. Whether you’re looking for a quick, guaranteed sale or need guidance on handling the probate process, our team is here to help with straightforward, practical solutions tailored to your unique situation. Get in touch today for a no-obligation chat about how we can help you move forward with confidence and peace of mind.
What Is the Best Way to Sell Inherited Commercial Property?
There are several methods for selling inherited commercial property in the UK, each with its own advantages and potential drawbacks. The best choice depends on your specific circumstances, timeline, and priorities.
Traditional Commercial Estate Agent
Working with a NAEA Propertymark-certified commercial agent provides expert market knowledge and marketing reach. However, this approach typically takes the longest, with commercial properties often requiring 6-12 months to sell. You’ll also need to factor in commission fees, which are typically higher for commercial properties than residential sales.
Commercial Property Auction
Auctions can provide a quick sale with a specific completion date, typically 28 days after the auction. This method works well for properties that may be difficult to value or require renovation. However, properties sometimes sell below market value, and once the hammer falls, you’re legally committed to the sale.
Direct Sale to Property Buying Company
Companies like Property Saviour specialise in purchasing commercial properties directly, offering a guaranteed sale without the uncertainty of traditional marketing methods. This approach provides:
Certainty of completion
No fees or commissions
Faster timeline (often weeks rather than months)
Purchase of properties in any condition
Avoidance of complicated chain transactions
For many inheritors, particularly those with no experience in commercial property or those needing to divide an inheritance among multiple beneficiaries, a direct sale provides valuable peace of mind and eliminates ongoing costs and responsibilities during what is already a difficult time.
Sell with certainty & speed
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘fake cash buyers’ who require a valuation for a mortgage or bridging loan.
- These valuations result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.
