Inherited my parents’ house, now what?

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If you have recently inherited a house, it can be difficult to work through the potential options that are available to you. There are quite a few things to consider, and the best course of action could be different depending on your circumstances. However, there are a few major points to think about in the initial stages.

The nature of your ownership is important – do you own part of the house alongside other inheritors, or does it all belong to yourself? A consideration of inheritance tax issues is also necessary. Finally, you will need to make a decision on what you intend to do with the property – and how best to go about enacting this.

Immediate concerns

One of the most pressing issues after inheriting a house is establishing if there is any Inheritance Tax due. The latest date this is payable is the end of the sixth month after the deceased has passed. It may be that there is no Inheritance Tax owed – for example, if this has already been paid by the estate, or if the value of the estate (possessions and money as well as property) is beneath the current threshold.

Presently, this threshold stands at £325,000 per individual, but, as summarised in the Telegraph, is due to increase gradually from this year. If the value of the estate exceeds this threshold, a 40% Inheritance Tax is applied to the remaining amount.

You need to apply for a Grant of Probate in order to manage and organise the estate. This is a legal document that will enable you to sell your house, should you wish. Other things to think about are whether you need to inform any lenders or utility companies of the passing of the deceased, and also give them an indication of your own intentions for the property.

Decide what to do with the property

You have a few options regarding what to do with a property you’ve inherited. You may wish to sell the property to a company such as Probate Purchases, who specialise in the probate house sale market, and so are sympathetic to the issues of inheriting property. To do this, a Grant of Probate is required, so this is something to consider if you are thinking of selling.

If you wish to keep the property and live in it, it is worth reading up on the tax rules regarding this – for example, if this is not your ‘main’ home, additional tax may be payable on the property. Alternatively, if you wish to rent out the property, further tax on any income you make on the property is likely to be required – see government pages dedicated to tax for more information regarding these.

Although the decisions required of you may seem daunting, there are places to go, and resources to use, in order to help to simplify the process of inheriting property.

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