What happens when a house is sold through probate?

If you are dealing with the sale of a house after someone has died, you will need to obtain a Grant of Probate or a Grant of Administration. We take a look at the process of selling a house through probate and the stages that you will need to go through to answer the question “What happens when a house is sold through probate?”.

At Lockings Solicitors, we routinely deal with probate property sales for clients who are winding up the estate of a loved one. We can obtain a Grant of Probate or Grant of Letters of Administration on your behalf and deal with the estate administration if required, to include the sale of a property.

We know that this is likely to be a difficult time for you and you will find our probate solicitors to be sympathetic and understanding. We will be happy to have a free initial conversation with you to answer any preliminary questions you may have such as the likely timescale and costs involved.

Our team are very experienced in dealing with estate administration and we always work proactively to avoid delays where possible. We handle a full range of matters, including intestate estates (where the deceased did not leave a Will), Inheritance Tax advice and complex family situations. You can ring us on 01482 300 200, email us at welcome@lockings.co.uk or fill in our Free Online Enquiry and we will call you back promptly.

Do I need a Grant of Probate to sell a house?

If the estate contains a property, you will need either a Grant or Probate or a Grant of Letters of Administration in order to sell this.

If the deceased left a Will, the executor named in the Will needs to apply for a Grant of Probate. Where no Will was made, someone entitled to inherit the estate under the Rules of Intestacy will need to apply for a Grant of Letters of Administration.

A grant is issued by the Probate Registry. Before you send an application to them, you need to go through some other steps.

How is a house sold in probate?

The stages involved in selling a probate house are:

1. Register the death and obtain copies of the death certificate

2. Value the estate

3. Calculate and pay Inheritance Tax

4. Apply for a Grant of Probate or Grant of Letters of Administration

5. Complete the property sale

Registering a death

A death needs to be registered within five days. You do this by notifying the registrar, which can be done in person or online. You are advised to purchase several copies of the death certificate as you will need to send these out to all of the organisations where the deceased had dealings, for example, to banks and investment companies.

How to value an estate for probate

You need to establish the value of the net estate. This is the value of the deceased’s assets minus any liabilities such as unpaid tax, a mortgage and credit card balances.

You will need to write to everyone that the deceased had an account with, send a copy of the death certificate and ask them for a valuation of the account, investment or debt as at the date of death.

Valuable possessions also need to be valued and included in the total. This could be property, a car, furniture, jewellery or art. You may be able to establish the value of some items based on recent sales of similar items. Alternatively, you can obtain a professional probate valuation. This is different to a market appraisal and is specifically for use in valuing an estate.

You also need to establish whether the deceased gave away gifts of over £3,000 in any of the seven years preceding their death, as Inheritance Tax could be payable on these on a sliding scale.

If you believe that Inheritance Tax will be payable, you should ask HM Revenue & Customs to send you an Inheritance Tax reference number. This should be done at least three weeks before you intend making a payment.

Calculate and pay Inheritance Tax

Once you have a value for the net estate, you can calculate whether Inheritance Tax is payable. This can be complicated, so you may want to speak to a probate solicitor to ensure that you have dealt with it correctly.

Broadly speaking, the first £325,000 of an estate is exempt from Inheritance Tax as well as anything over this threshold that is left to a spouse, civil partner or charity. If the deceased’s spouse or civil partner has already died and their estate did not use the whole of their £325,000 allowance, the balance can be used by the deceased’s estate.

Inheritance Tax is usually payable at a rate of 40% on the part of the estate that exceeds the allowance.

You will need to fill out several IHT forms which are available on the government website. As well as a main form, there are separate schedules to be completed for each type of asset that the deceased held.

Once you have done this and worked out how much Inheritance Tax is due, you need to pay this to HM Revenue & Customs before you apply for a grant.

You will usually be able to ask the deceased’s bank or building society to pay the Inheritance Tax, if there is enough money in the account. If not, there is an option to pay in instalments in respect of the tax on some assets that may take time to sell, such as a property.

Inheritance Tax (or the first instalment) must be paid by the end of the sixth month after the death.

Apply for a Grant of Probate or Grant of Letters of Administration

Once the forms have been sent to HM Revenue & Customs and the Inheritance Tax paid, you need to wait around two to three weeks before you apply to the Probate Registry for a Grant of Probate or Grant of Letters of Administration. This will give HMRC the opportunity to process the payment and confirm to the Probate Registry that it has been made.

You will need to send the application form and a cheque for the application fee to the Probate Registry together with an official copy of the death certificate and the original Will, if there is one, plus any codicils.

How long does it take to get probate and sell a house?

Dealing with an estate valuation can take several weeks. It is time-consuming and how long this part of the administration takes will depend on how much time the executor or administrator has to devote to the task. The Probate Registry usually take several months to process the application, depending on how busy they are and whether they have any backlog of cases.

You can expect the time taken to obtain a Grant of Probate or Grant of Administration to take several months. You cannot complete a sale of the property until you receive the grant.

You can however start to market the property before the grant is received. You may want to wait until the application has been sent to the Probate Registry, but as conveyancing can also take a good number of months to complete (depending on the position of the parties such as whether they are in a chain, need mortgage funding, are motivated and have a good conveyancing solicitor), you can arrange for viewings, accept an offer and ask your solicitor to start work on the conveyancing in the meantime. The ideal to aim for is once the grant is received the buyers will be nearing the point where they are ready to exchange contracts.

Contact our East Yorkshire probate solicitors

At Lockings Solicitors, we offer a complete estate administration service if required, dealing with the estate valuation, Inheritance Tax calculation and payment, applying for a grant and carrying out the conveyancing on the property sale. You can ring us for a FREE initial chat on 01482 300 200, email us at welcome@lockings.co.uk or fill in our Free Online Enquiry and we will call you back promptly. As well as helping local clients in Beverley, Hull and York, we also act for clients from across East Yorkshire and beyond.