When you inherit property from someone who has passed away, you may decide to sell it. Here’s what you need to know about taxes if you sell an inherited property in the UK.
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if I sell inherited property is it taxable?
You may be wondering if I sell my inherited property is it taxable? The short answer is no.
You don’t have to pay any tax when selling an inherited property. However, there are some important points to understand:
- Inheritance Tax: Before you inherit the property, the deceased person’s estate may have to pay Inheritance Tax if the total value exceeds the tax-free threshold (currently £325,000 for an individual or £650,000 for a married couple/civil partners). The estate pays this tax before you receive your inheritance.
- Capital Gains Tax: When you sell the inherited property, you may have to pay Capital Gains Tax (CGT) on any value increase since the previous owner’s death date. This is because the property’s value is “re-based” at the date of death. Example: If the property was worth £200,000 when inherited and you sell it for £250,000, you may have to pay CGT on the £50,000 gain.
Do I pay capital gains tax when i sell an inherited property
To calculate the CGT, you need to know:
- The value of the property when you inherited it (the “re-based” value)
- The sale price of the property
- Any costs related to the sale (e.g., legal fees, estate agent fees).
The taxable gain is calculated as: Sale price – Re-based value – Costs of sale = Taxable gain.
You only pay CGT on the taxable gain above your annual tax-free allowance (£12,300 for 2024/25). The CGT rate depends on your total taxable income for the year:
- Basic rate taxpayers (up to £50,270 income): 18% on gains from residential property, 10% on other gains
- Higher/additional rate taxpayers (over £50,270 income): 28% on gains from residential property, 20% on other gains
Exceptions and Reliefs
There are some exceptions and reliefs that may reduce or eliminate the CGT due:
- Principal Private Residence Relief: If the property was the deceased’s main home, you may be able to claim full relief from CGT when you sell it.
- Letting Relief: If you rented out the property, you may be able to claim additional relief.
- Annual Exempt Amount: The first £12,300 of your taxable gains in 2024/25 is exempt from CGT.
It’s always a good idea to keep records of the property’s value when inherited, any improvements made, and costs of sale to accurately calculate any CGT due. In summary, while selling an inherited property itself is not taxable, you may need to pay Capital Gains Tax on any increase in value since the previous owner’s death.
Seek professional advice if you’re unsure about your specific situation.
Do I pay tax when i sell an inherited property?
You don’t pay any tax when you initially inherit the property itself. Inheritance Tax is paid by the deceased’s estate before assets are distributed.
Can We Help?
Selling an inherited property to a cash buyer can offer several benefits, including:
- Speed of Sale: Cash buyers can complete the sale faster, often within a few weeks or even days. This can be advantageous if you need to settle the deceased’s affairs quickly or if probate bills are mounting.
- No Property Chain: Since cash buyers don’t need to sell their own property first, there is no risk of the sale falling through due to a broken chain.
- No Mortgage Delays: Without a mortgage, you avoid delays caused by lenders’ processes and valuations.
- Fewer Complications: Cash sales generally have fewer contingencies and complications than traditional sales involving mortgages.
- Sell ‘As Is’: Cash buyers often purchase properties in their current condition, saving you the cost and hassle of repairs or refurbishment.
However, it’s important to note that selling to a cash buyer may result in a lower sale price than the open market value. Cash buyers typically offer below-market prices to account for the convenience and speed they provide.
Regarding taxes, selling an inherited property to a cash buyer does not directly impact your taxes. You may still be liable for Capital Gains Tax (CGT) on any property value increase since the previous owner’s death, regardless of whether you sell to a cash buyer or through the traditional route.
If you have already received the Grant of Probate, you can sell the inherited property within a few days to a cash buyer, as you have the legal authority to transfer ownership. This can be particularly beneficial if probate bills accumulate and you must settle the estate quickly.
Inherited Property? Sell It Fast with Property Saviour
Parting with an inherited property can be emotional. At Property Saviour, we understand your challenges and are here to make the journey as smooth as possible.
With over 50 years of combined experience in the property industry, we specialise in providing a hassle-free solution for selling your inherited property quickly and efficiently.
The Property Saviour Advantage
When you choose to work with us, you can expect:
1. Lightning-Fast Sale
We pride ourselves on completing the sale of your inherited property in as little as 10 days. No more waiting around for months, watching probate bills pile up.
2. Cash Offers, No Strings Attached
We understand that inherited properties often come with their fair share of complications. That’s why we make cash offers, allowing you to sell your property ‘as-is’ without costly repairs or renovations.
3. Unwavering Support
Our dedicated team will guide you through every step of the process, from arranging probate to organising property clearance. We’ll even cover all legal fees up to £1,500, ensuring a stress-free experience.
4. No Obligation, No Pressure
At Property Saviour, we believe in transparency and honesty. That’s why we offer a no-obligation cash offer for your inherited property. Give us a call or fill out our online form, and we’ll provide you with a fair and competitive offer, no strings attached.
Move Forward with Confidence
Inheriting a property can be a bittersweet experience, but it doesn’t have to be a burden.
With Property Saviour, you can sell your inherited property quickly, efficiently, and with the utmost care and professionalism. Take the first step towards a fresh start today.
Contact us, and let us help you with the process of selling your inherited property with ease.
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 ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys 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.
