They say that selling a property is one of the most stressful things you can do. It therefore goes without saying that when you are required to sell a property following a death, the bereavement, additional paperwork and official protocol makes the whole process all the more stressful for you, and your family. So, what’s the best way to go about it?
With property usually being the largest asset within an estate, there is naturally a great deal of focus on the value, especially when IHT (Inheritance Tax) is to be taken into consideration.
The valuation of a property for probate is taken at the date of death. This means that the Executor needs to apply a great deal of caution – particularly in todays market (November 2022) where property prices might start to come down for the first time in many years. This could see a date of death valuation being higher than the actual sum achieved. This can result in a refund for any Inheritance Tax overpayment that might be made. However, this is not guaranteed and it can only be claimed if the property in question is sold within four years of the deceased’s passing.
If a sale price is greater than the figure submitted for probate, HMRC will likely try to substitute the sale price instead of the probate value and recalculate the IHT liability.
The payment of IHT needs to commence (where applicable) by the end of the six-month period following the date of death. Therefore, marketing the property needs to commence relatively swiftly.
We would advise that you get a valuation completed as early on as you can and get the property in a state that its ready for sale. This, along with creating the necessary marketing with the estate agent, finding a buyer and the conveyancing to expedite the sales process is a lengthy process, but it can take place – in most situations, whilst waiting for GOP (Grant of Probate); a process that can also take six to 12 months.
These are the steps to consider:
- Once the valuation has been completed, evaluate the situation. Is the property presentable and in a suitable condition and are there any tenants to deal with?
- Once the above is taken care of, list the property ASAP.
- Use the time, prior to receiving the GOP (this can be 6 to 12 months), to ensure the maximum number of viewers are introduced to the property.
- All viewers should be informed of the reason for the sale and that because of the GOP process, that this is no quick turnaround. If they are in a rush, advise them that this is perhaps not the property for them.
- Once the buyer has been identified, conveyancing can commence and hopefully, by the time all parties are ready to exchange the GOP will have been received. This will enable you to conveniently and efficiently, tie the two matters together.