Selling a House You Inherited: Tax and Legal Guide

Inheriting a property can be financially significant, but it also brings a series of legal, tax, and practical decisions that need to be handled carefully. Whether you have inherited a house through a will or under the intestacy rules, the process of selling it is more involved than a standard property sale. There are probate requirements, tax considerations, and — if there are multiple beneficiaries — the need to reach agreement on how to proceed.

This guide covers the full process of selling an inherited property in England and Wales, from the grant of probate through to completion. It explains what taxes may be due, how ownership is transferred, and how to prepare the property for sale. For more on the probate-specific steps, see our detailed guide on selling a house after probate.

When is probate needed to sell an inherited property?

Probate is the legal process of proving a deceased person's will and obtaining the court's authority to deal with their estate. If the deceased left a will, the named executor applies for a grant of probate. If there was no will, the nearest eligible relative applies for letters of administration under the intestacy rules. In either case, the grant gives the personal representative the legal authority to sell, transfer, or otherwise deal with the estate's assets.

You will need a grant of probate to sell an inherited property if:

• The deceased was the sole owner of the property (whether freehold or leasehold)
• The property was held as tenants in common with another person — the deceased's share forms part of their estate and requires probate to be dealt with

Probate is not needed if the property was held as joint tenants, because ownership passes automatically to the surviving joint owner by right of survivorship. In this case, the surviving owner simply needs to register the death with HM Land Registry using form DJP (Death of Joint Proprietor) to remove the deceased from the title.

The probate application is made to the Probate Registry (part of HM Courts & Tribunals Service) and currently takes eight to twelve weeks on average from submission to receiving the grant, though delays can extend this. You can apply online at GOV.UK or through a solicitor. For a fuller explanation of the probate process and how it affects the sale timeline, see our guide on selling after probate.

Inheritance tax: thresholds, rates, and the residence nil-rate band

Inheritance tax (IHT) is a tax on the estate of someone who has died. It is paid by the estate — not by the individual beneficiaries — before assets are distributed. IHT is relevant to the sale of inherited property because the property must be valued for IHT purposes, and in some cases IHT must be paid before the grant of probate can be issued.

Current IHT thresholds

The main IHT thresholds for the 2025/26 tax year are:

The nil-rate band and RNRB have been frozen at their current levels since April 2009 and April 2020 respectively, and are legislated to remain frozen until at least April 2028. Estates valued above the applicable threshold are taxed at 40% on the excess, or at a reduced rate of 36% if at least 10% of the net estate is left to charity.

The RNRB taper

The residence nil-rate band is tapered for estates valued at more than £2 million. For every £2 above that threshold, the RNRB is reduced by £1. This means the RNRB is fully lost when the estate exceeds £2.35 million (for the £175,000 RNRB). Higher-value estates should take professional tax advice, as the interaction between taper, other reliefs, and the value of the property can be complex.

Paying IHT before probate

Where IHT is due, HMRC typically requires at least some of the tax to be paid before the grant of probate is issued. The executor can apply to pay in instalments over ten years for property, but an initial payment is still usually needed. Many executors fund the initial IHT payment from the deceased's bank accounts using the Direct Payment Scheme (formerly the Bereavement Payment Scheme), which allows certain banks and building societies to release funds directly to HMRC before the grant is issued.

Capital gains tax on inherited property

Capital gains tax (CGT) is the tax most directly relevant to selling an inherited property. Unlike IHT, which is paid by the estate, CGT is the responsibility of the person who sells the property — whether that is the executor selling on behalf of the estate, or a beneficiary selling after the property has been transferred to them.

For a comprehensive breakdown of how CGT applies to inherited property, see our dedicated guide on capital gains tax on inherited property.

How the base cost works

When you sell an inherited property, you do not use the price the deceased originally paid for it as your base cost. Instead, your base cost is the probate valuation — the market value of the property at the date of death. This is the value declared to HMRC on the IHT return (form IHT400 or the simplified IHT205/IHT217).

The taxable gain is calculated as:

• Sale price
• Minus the probate valuation (base cost)
• Minus allowable costs (solicitor fees, estate agent commission, Stamp Duty on the probate valuation if applicable, and the cost of any capital improvements you have made)
• Minus the annual exempt amount (£3,000 for 2025/26)

CGT rates on residential property

For the 2025/26 tax year, the CGT rates on residential property gains are:

If the gain, when added to your other income, pushes you from the basic rate into the higher rate, the portion of the gain above the basic-rate threshold is taxed at 24%. CGT on UK residential property must be reported and paid within 60 days of completion using the HMRC Capital Gains Tax on UK Property service.

Getting the probate valuation right

The probate valuation is critical because it serves as both the IHT value and the CGT base cost. If the property is undervalued for probate, you pay less IHT but more CGT when you sell (because the base cost is lower). If it is overvalued, the reverse applies. HMRC can challenge the probate valuation up to four years after the IHT return is filed. An independent RICS-qualified surveyor valuation is strongly recommended for properties of significant value.

Transferring title: the assent process

Before an inherited property can be sold by a beneficiary, the legal title must be transferred from the deceased (represented by the executor) to the beneficiary. This is done through a legal document called an assent.

What is an assent?

An assent is the formal transfer of a property from the estate of a deceased person to the beneficiary entitled to it. For registered land in England and Wales, this is done using form AS1, which is submitted to HM Land Registry along with the grant of probate, the death certificate, and the appropriate fee. Once the assent is registered, the beneficiary appears on the title register as the new legal owner.

Selling before vs after transfer

There are two ways to sell an inherited property:

1. The executor sells directly from the estate. The executor has the legal authority (under the grant of probate) to sell the property without first transferring it to the beneficiary. The executor signs the contract and transfer deed, and the sale proceeds are distributed to the beneficiaries after deducting any estate debts, taxes, and administration costs. This is often the simpler and faster approach.
2. The property is assented to the beneficiary, who then sells. The executor completes form AS1 to transfer the property to the beneficiary, who becomes the registered owner and then sells in the usual way. This adds an extra step and a Land Registry registration fee, but gives the beneficiary direct control over the sale. It also means the beneficiary is personally responsible for reporting and paying any CGT.

Which approach is better depends on the circumstances. If the beneficiaries want a quick sale and the executor is willing and able to manage it, selling from the estate avoids the delay and cost of the assent. If the beneficiary wants to live in the property for a period before selling, or if there are disagreements between beneficiaries that need to be resolved first, transferring the title may be more appropriate.

Executor vs beneficiary: who does what?

Understanding the roles and responsibilities of executors and beneficiaries is important when selling an inherited property, particularly where there is more than one beneficiary.

Executor responsibilities

• Securing the property from the date of death (changing locks if necessary, arranging insurance, notifying utility providers)
• Obtaining the grant of probate and managing the estate administration
• Valuing the property for IHT purposes and filing the IHT return
• Paying any IHT due from the estate before the grant is issued
• Instructing solicitors and estate agents to handle the sale, if selling from the estate
• Acting in the best interests of all beneficiaries and obtaining a fair market price
• Distributing the net sale proceeds to beneficiaries according to the will or intestacy rules

Beneficiary rights

• The right to be kept informed about the progress of the estate administration
• The right to receive their share of the estate as set out in the will or under the intestacy rules
• The right to challenge the executor's actions if they believe the executor is not acting properly (for example, selling below market value)
• No automatic right to occupy the property during administration, unless the will specifically provides for it

Multiple beneficiaries and joint decision-making

Where a property is left to more than one person, the beneficiaries must reach agreement on what to do with it. The common options are:

• Sell the property and divide the proceeds according to the shares specified in the will or under intestacy. This is the most common approach and avoids the complications of shared ownership.
• One beneficiary buys out the others. This requires an independent valuation and agreement on price. The buying beneficiary may need a mortgage, and Stamp Duty Land Tax (SDLT) may be payable on the consideration above £250,000.
• Keep the property as a shared investment. The beneficiaries can hold the property as tenants in common and let it out. This requires a formal agreement covering management responsibilities, costs, and what happens if one party wants to sell later.

Disagreements between beneficiaries are one of the most common reasons inherited property sales stall. Where agreement cannot be reached, any beneficiary can apply to the court under Section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) for an order directing the executor to sell. Court applications are expensive and time-consuming, so mediation is always worth attempting first.

Preparing an inherited property for sale

Inherited properties often need more preparation than a typical home sale. The property may have been unoccupied for weeks or months, the deceased may not have maintained it to a sellable standard, and the contents will usually need to be cleared. Here is what to consider:

Clearing the property

Clearing a deceased person's belongings is one of the most emotionally difficult aspects of selling an inherited property. Before clearing, make sure to:

• Check for important documents (deeds, insurance policies, financial papers, keys to safety deposit boxes)
• Agree with other beneficiaries about personal items, heirlooms, and anything of sentimental value
• Consider using a professional house clearance company for bulk items — costs typically range from £500 to £2,000 depending on the size of the property
• Check whether any items have significant value (antiques, jewellery, artwork) and may need separate valuation

Repairs and presentation

You do not necessarily need to renovate an inherited property before selling. The right approach depends on the condition of the property and the local market:

• Minor cosmetic work (deep cleaning, repainting, tidying the garden) is almost always worthwhile. It costs relatively little but can significantly improve buyer perception.
• Essential repairs (fixing a leaking roof, addressing damp, repairing broken windows) should be done where the cost is modest compared with the impact on the sale price. Issues flagged on a buyer's survey will lead to renegotiation or withdrawal.
• Major renovation is rarely advisable unless you have the budget, time, and expertise to manage it. Selling “as is” to a buyer who plans to renovate is often more practical, even at a lower price.

For a full list of what your solicitor will need, see our guide on documents needed to sell a house.

Empty property costs and risks

An inherited property that sits empty during the probate and sale process incurs ongoing costs that can add up quickly. Being aware of these from the outset helps you plan your timeline and budget.

These ongoing costs are a strong argument for starting the sale process as early as possible. Marketing the property while the probate application is in progress, rather than waiting for the grant, can reduce the period the property sits empty and save the estate significant money.

Timeline: from death to sale completion

Every inherited property sale is different, but here is a typical timeline showing how the key stages fit together:

The most effective way to shorten this timeline is to run stages in parallel wherever possible. Clearing and preparing the property while the probate application is being processed, and marketing the property before the grant is issued, can compress the overall timeline significantly. For a full breakdown of what to expect from the legal side, see our guide on conveyancing costs.

Tax implications of selling a deceased person's property

When selling an inherited property, there are two main taxes to be aware of: inheritance tax (IHT) and capital gains tax (CGT). They apply at different stages and to different people, so it is important to understand how each one works.

Inheritance Tax (IHT)

IHT is paid by the estate, not by individual beneficiaries. It is charged at 40% on the value of the estate above the nil-rate band, which is currently £325,000. If the deceased's main residence is being passed to direct descendants (children, grandchildren, or stepchildren), the residence nil-rate band (RNRB) of £175,000 may also apply, giving a combined threshold of £500,000 for a single person.

Married couples and civil partners can transfer unused allowances to the surviving spouse, potentially doubling the combined threshold to up to £1,000,000. Crucially, IHT must be paid — or arrangements made with HMRC — before the grant of probate is issued. This means executors often need to fund an initial IHT payment before they have access to the estate's full assets.

Capital Gains Tax (CGT)

CGT applies when you sell an inherited property for more than its market value at the date of death. The key point is that your base cost for CGT purposes is the probate value (the market value at the date of death), not the price the deceased originally paid for the property. Any increase in value between the probate value and the sale price is a taxable gain.

For the 2024/25 tax year, CGT on residential property is charged at 18% for basic-rate taxpayers and 24% for higher-rate and additional-rate taxpayers. The annual CGT allowance is £3,000, which can be deducted from the gain before tax is calculated. If the property was the deceased's main residence and the sale is completed during the administration period (before the estate is fully wound up), private residence relief may eliminate the CGT liability entirely.

Worked example

Suppose a property has a probate value of £300,000. The executor sells it 18 months later for £320,000. The taxable gain is calculated as follows:

In this example, the seller would owe £4,080 in CGT. Executors must report and pay CGT within 60 days of completion using HMRC's Capital Gains Tax on UK Property service. Missing this deadline can result in penalties and interest.

For a detailed breakdown of CGT on inherited property, including reliefs and exemptions, see our guide on capital gains tax on inherited property. If you are also dealing with a second property, our guide on capital gains tax when selling a second home covers the additional considerations that apply.

Sources

• HMRC — Inheritance Tax thresholds and rates (GOV.UK)
• HMRC — Capital Gains Tax on UK property: report and pay within 60 days (GOV.UK)
• HM Courts & Tribunals Service — Apply for probate (GOV.UK)
• HM Land Registry — Form AS1: Assent of whole of registered title (GOV.UK)
• HM Land Registry — Form DJP: Death of joint proprietor (GOV.UK)
• Trusts of Land and Appointment of Trustees Act 1996 — legislation.gov.uk
• The Law Society — Conveyancing Protocol, 5th edition (lawsociety.org.uk)
• HMRC — Direct Payment Scheme for inheritance tax (GOV.UK)
• Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018 — legislation.gov.uk

Related guides

• Selling a House to a Family Member: What to Consider

Frequently asked questions