Selling an Inherited Property in Central London Explained

A death in the family and selling a house in Central London are two of life’s most stressful life events, so there can be incredible pressure when both are intertwined. Selling inherited property in Marble Arch, Bayswater, Notting Hill or another location in the capital is much like any other house sale, although additional legal aspects need to be considered, such as tax on an inherited property.

Another factor to consider is that properties in Central London areas, such as Kensington and Belgravia, are highly sought after and often buyers require confidential selling. Therefore, you should choose an estate agent who has experience of working with these types of buyers and high value properties.

We look at what you need to know when selling inherited property after probate, from the Will and an inheritance tax bill to property preparation and key timings.

1. Read The Will

If the person who has died left a Will, it will detail the name of the executor (the person in charge of making sure the last wishes are carried out) and the beneficiaries (the people who will benefit from the estate). If the property has been left to more than one person, you and your siblings or perhaps civil partners, for example, deciding whether to sell inherited property could be more complex.

2. Apply For Probate

After someone has died, the first step in organising their estate is to apply for a grant of probate from the Probate Registry. If the person left a Will, the executor needs to make the application.

If there is no Will (considered ‘intestate’), the deceased’s spouse, civil partner or adult child can apply to administer the estate and apply for probate. Seek advice from a solicitor if this applies to you, especially if you think selling an inherited property will be high on the priority list.

Once probate has been granted, the executor has the legal authority to act on behalf of the deceased and get access to bank accounts, investments and property so it can be distributed among beneficiaries. The probate process usually takes six to eight weeks before it is granted.

3. Get A House Valuation For Probate

As part of the probate process, you will need to report to HMRC how much inheritance tax you will be liable for, based on the total value of the estate of the person who has died. This involves arranging a property valuation and it is advised this is obtained from a professional (unless the gross value of the whole estate is less than £250,000).

Plaza Estates can offer a free valuation for inheritance tax bill purposes, taking into account structural complexities and the dwelling’s condition. Please specify the valuation is for probate, so you receive an open market valuation, not an asking price.

Alternatively, you could use a RICS (or equivalent) surveyor. These may carry more weight with HMRC as they provide formal documents. If you are investigated by HMRC and are required to go to court regarding an inherited property, having a formal valuation from a RICS surveyor will make your life much easier. It is advised that you go down this route for higher-value properties that are typical of Hampstead, Kensington or Chelsea, for example, or those with added complexities. Of course, the obvious disadvantage to this is the cost of hiring a surveyor.

Want to know more? Sellers in this position will benefit from understanding solicitor fees for selling a house and taxes on buying and selling property.

4. Address Any Mortgage Payments

Often mortgages and loans have already been paid off with inherited property but this is not always the case. If you have inherited a property with an outstanding mortgage, the monthly payments will continue and you’ll be responsible for repayments once ownership transfers to you.

Get in touch with the mortgage lender as early as possible (before probate) to discuss the situation. They may be prepared to arrange a mortgage payment holiday until the probate is finalised. If the debt is not settled, the property could be repossessed to pay the mortgage off. If you will struggle to afford the repayments, you may need to arrange a quick sale of an inherited property.

5. Preparing To Sell Your Inherited Property

Selling inherited properties is usually more successful when they are clear of the previous owners’ contents, although you may want to retain some of the furniture to help the property look more attractive to buyers. You can hire professional house clearance companies to help you.

If the inherited property looks dated, you could consider redecorating and replacing carpets to make it more appealing to potential buyers. Just be careful how much you spend – too much and you may not recoup your costs. Local estate agents will be able to value your property and suggest how much renovations could add to the sale price.

When you sell the inherited property, the process will be the same as selling any other home, although you may have to pay added taxes on the proceeds of the property sold – see below.

6. Getting An Inherited House Ready For Sale

Before your inherited property goes on the market, you may need to arrange the following:

• House clearance – If lots of belongings are still in the house, getting the bulk of the items collected by a charity or taking items to the tip will help with the sale. An overly cluttered property can put viewers off.
• Tidy up the outdoor space – The front of the house is the first impression viewers will get, so it is important this is as tidy as possible. You may need to hire a gardener to tidy up the outdoor space to make it more presentable or mow the grass and cut back hedges yourself.
• Repainting – Assess the condition of the interior walls. If they have scuffs and scrapes, a fresh coat of paint will make a big difference. Any wooden doors or window frames might also benefit from being repainted.
• Deep clean – Depending on its condition, you might also consider using a deep cleaning service before selling inherited property, especially if there are marks on carpets or any odours.
• Minor repairs – Get any minor repairs completed, such as replacing broken tiles, fixing broken cupboard handles, filling any holes in the plaster etc.
• Energy Performance Certificate – All properties must have a valid EPC (Energy Performance Certificate) that should be provided to prospective buyers.

Options For Selling Inherited Property

There are several different ways to sell the inherited property: choose the option most suited to your priorities.

These are the most common ways to sell a property:

Estate Agent

Using an estate agent has many benefits, including their local area knowledge. If you are selling inherited property in Central London, local estate agents will have expertise that allows them to achieve the best price. They may also have a waiting list of pre-qualified buyers looking for a high value main home.

An estate agent will also handle the majority of the work involved in selling the property, such as marketing and viewings. The length it takes for the sale process may be longer than using other options but in areas where properties are selling quickly – such as Paddington and Camden – a sale can be completed in a couple of months.

Auction House

If you are inheriting a property and need a quick sale, an auction house could be the best option. However, you should bear in mind that selling through an auction house might not get you as high a value for your property compared to using an estate agent. If there is a lot of work required on the property, it might be easier to go through an auction house. This is because auction buyers are often looking for bargain properties and they will then arrange the renovations themselves.

Property Buying Company

You could also consider using a property buying company if you’re not keeping an inherited property as a main home. This option can help you to sell the property in less than a week but the company may only offer you around 80% (or less) of the market value.

7. Pay Inheritance Tax

In England and Wales, inheritance tax is set at a rate of 40% (this rate is frozen until 2031) but there are some tax exemptions and possible tax reliefs that could be applicable, depending on the circumstances:

• Spouse/civil partner – Assets left to a spouse or civil partner are exempt from inheritance tax.
• £325,000 tax-free inheritance tax threshold (nil rate band) – Everybody has a £325,000 inheritance tax allowance. So, if you inherit a property worth £300,000, you won’t have to pay inheritance tax.
• Residence nil rate band (RNRB) – Assets left to children or grandchildren have an additional £175,000 main residence allowance, taking the total allowance to £500,000.
• Charity donations – If 10% or more of the value of the estate has been left to charity, the tax rate on some assets reduces to 36%.
• Passing on unused inheritance tax allowance – Any unused allowance can be passed onto a spouse. For example, if a person passes away and the assets are left to their spouse, they have not used their allowance. When the surviving spouse passes away, they could have a combined £1 million inheritance tax allowance.

More information about how inheritance tax works and any relief or exemptions can be found online, or seek professional tax planning advice.

The executor of the will is responsible for paying inheritance tax and one of their most common questions is ‘how to pay inheritance tax without selling property’. Sometimes the funds from the estate are valuable enough to make this payment, without selling a property. Inheritance tax is due by the end of the sixth month after the person died, even if the estate is still being settled. For property, it is possible to pay in instalments until the home is sold.

Want to find out more? You may also find it useful to budget with our cost to sell a house guide and find out why your flat isn’t selling.

8. Pay Capital Gains Tax

If the property has increased in value since you inherited it, you will have to pay capital gains tax (CGT) on the profit. If you are in the basic tax band, you will pay 18% CGT on any profits from the sale. If you are in the higher or additional tax bands, you will pay 24%.

Everyone has an annual CGT personal allowance, but the allowance has reduced significantly in recent years. In the tax year 2021/22, the tax-free amount was £12,300 but the allowance has been reduced to £3,000 for the 2024/25 tax year.

As an example, if inheriting a property in Central London that was valued at £850,000 when you took ownership and the property is sold for £900,000, you would have to pay capital gains tax on the £50,000 increase in value. The amount of CGT due would depend on which tax band rate you are in.

If you move into the inherited property and live in it for at least two years before selling, capital gains tax won’t be payable when you sell as it’ll be classed as your main home. You can also minimise the capital gains tax owed by selling quickly after inheriting a property, before there is time for it to grow significantly in value.

Frequently Asked Questions

We Can Help

If you are inheriting a property in Central London areas such as Earls Court, Hampstead or Regents Park and are considering selling it, talk to one of our friendly team. We can help you value the property and offer advice on renovations that could increase the property price. Get in touch today.

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