Inheriting a house or flat can leave you with some important decisions to make. You may choose to live in the property, rent it out, transfer it to another beneficiary or sell it.
Selling an inherited property in Scotland follows much of the same conveyancing process as an ordinary property sale. However, there are additional legal, tax and administrative matters to resolve before ownership can be transferred to a buyer.
This step-by-step guide explains how to sell an inherited property in Scotland, how the process differs from selling your own home and some of the issues executors and beneficiaries should consider.
What is an inherited property?
An inherited property is a house, flat, building or piece of land that passes to someone following the death of its owner.
The property may be left to a named beneficiary in a Will. Where there is no valid Will, the estate will be distributed according to Scotland’s rules of intestate succession.
The person responsible for dealing with the deceased’s estate is known as the executor. An executor may be named in the Will or appointed through the court if no executor has been nominated.
It is normally the executor, rather than an individual beneficiary, who has the legal authority to deal with and sell property belonging to the estate.
How is selling an inherited property different from selling your own home?
When you sell your own home, you are usually already recorded as its owner and can instruct a solicitor to begin the conveyancing process.
An inherited property can be more complicated because the owner recorded in the title has died. The executor must establish their authority to administer the estate and ensure that the property can be legally transferred.
The main differences can include:
- Obtaining Confirmation for the deceased’s estate
- Establishing who has authority to sell the property
- Checking the Will and the rights of beneficiaries
- Confirming how the property was owned
- Valuing the property as at the date of death
- Considering Inheritance Tax and Capital Gains Tax
- Reaching an agreement between multiple executors or beneficiaries
- Providing information about a property the seller may never have lived in
There may also be emotional considerations. Executors and beneficiaries are often making decisions about a property that contains family possessions or has significant personal value.
Step 1: Check the Will and identify the executor
The first step is to establish whether the deceased left a valid will.
The will should normally identify:
- The executor or executors
- The people who will inherit from the estate
- Whether the property has been left to a particular beneficiary
- Any instructions affecting how the estate should be distributed
Being named as a beneficiary does not necessarily give someone the immediate authority to sell the property. Responsibility for administering the estate generally sits with the executor.
Where there is no Will, an executor may need to be appointed through the appropriate legal process before the estate can be administered.
When several executors have been appointed, decisions about the sale should be discussed at an early stage. Delays can arise where executors disagree about whether to sell, when to market the property or what offer to accept.
Step 2: Establish how the property was owned
The property’s title should be checked to confirm how it was owned.
The deceased may have been:
- The sole owner
- A joint owner with a spouse, civil partner or another person
- An owner whose title contained a survivorship clause
- The owner of only a share in the property
A survivorship clause may mean that the deceased’s share passes automatically to the surviving joint owner. In that situation, the property may not pass through the estate in the same way as a solely owned property. Registers of Scotland confirms that, where an effective survivorship clause applies, ownership can pass without a separate transfer by the executor.
The title may also contain conditions, restrictions or securities that must be addressed during the conveyancing process. Checking ownership at the beginning helps establish who is entitled to instruct the sale and sign the necessary legal documents.
Step 3: Obtain a professional valuation
The property should be valued as at the date of death.
This valuation is important when calculating the overall value of the estate and establishing whether Inheritance Tax reporting or payment may be required. It can also provide the starting value for a future Capital Gains Tax calculation.
A realistic open-market valuation should be obtained rather than relying solely on an informal estimate or an online property valuation.
The eventual selling price may be different from the date-of-death value, particularly if the property is sold several months later or if improvements are completed before it goes onto the market.
Step 4: Deal with Inheritance Tax requirements
You do not normally pay tax simply because you inherit a property. However, Inheritance Tax may be payable by the deceased’s estate, depending on its total value and the exemptions or allowances available.
The standard Inheritance Tax threshold is currently £325,000. An additional residence-related allowance may be available where a qualifying home is passed to direct descendants, although the rules depend on the value of the estate and the individual circumstances.
Inheritance Tax is assessed against the estate as a whole, rather than the inherited property in isolation.
Tax rules can be complex, especially where the estate includes:
- Several properties
- Gifts made before death
- Business or agricultural assets
- Trust arrangements
- Foreign assets
- A property passing to a spouse or civil partner
- A property passing to children or grandchildren
Executors should obtain appropriate tax advice where they are uncertain about the estate’s obligations.
Step 5: Apply for Confirmation
In Scotland, Confirmation is the legal document that gives an executor authority to collect, administer and distribute the deceased’s estate.
The application normally includes an inventory setting out the property, money and other assets belonging to the deceased. Scottish Government guidance describes Confirmation as the document giving an executor authority to receive and make payments on behalf of the estate.
Confirmation will usually need to include the inherited property before the executor can complete its sale and transfer ownership to a buyer.
The property can sometimes be prepared for sale, valued or marketed while the Confirmation application is progressing. However, the timing should be discussed carefully, as the sale cannot normally be completed until the executor has the necessary legal authority.
The time required to obtain Confirmation will depend on matters including:
- Whether there is a valid Will
- The size and complexity of the estate
- Whether Inheritance Tax is payable
- Whether complete financial information is available
- Whether the property valuation is accepted
- Whether there are disputes between executors or beneficiaries
It is sensible to identify possible delays before agreeing an ambitious completion date with a buyer.
Step 6: Decide who will sell the property
The executor must decide whether the property will be sold directly from the estate or transferred to one or more beneficiaries before being sold.
Selling directly from the estate may be practical where the beneficiaries agree that they would prefer to receive their inheritance as money.
Alternatively, a property may be transferred to a beneficiary who then becomes responsible for any later sale. HMRC treats a direct transfer from an estate to a beneficiary differently from a sale by the estate for Capital Gains Tax purposes.
The right approach will depend on the will, the estate’s tax position, the beneficiaries’ wishes and the likely timing of the sale. Legal and tax advice should be obtained before choosing between these options.
Step 7: Prepare the inherited property for sale
An inherited property may need practical work before it is marketed.
This can include:
- Arranging suitable buildings insurance
- Informing the insurer that the property is unoccupied
- Securing doors, windows, garages and outbuildings
- Redirecting post
- Taking meter readings
- Checking heating and water systems
- Clearing personal possessions
- Maintaining the garden
- Arranging cleaning or minor repairs
- Locating guarantees, permissions and property documents
Executors should avoid disposing of possessions until they are satisfied that the items have been dealt with according to the Will and the beneficiaries’ rights.
Insurance is particularly important. A standard home insurance policy may not provide full cover once a property has been left empty for a certain period. The insurer should be informed about the owner’s death and the property’s occupancy status.
Step 8: Arrange the Home Report
Most residential properties marketed for sale in Scotland require a Home Report.
A Home Report contains:
- A Single Survey
- An Energy Performance Certificate
- A Property Questionnaire
The Single Survey covers the property’s condition, accessibility and valuation. The Energy Performance Certificate provides information about energy efficiency, while the Property Questionnaire gives buyers further details about the property.
Completing the Property Questionnaire can be more difficult when selling an inherited home. The executor may never have lived in the property and may not know its full repair, alteration or ownership history.
Executors should answer questions honestly and avoid guessing. Useful information may be found in:
- The deceased’s paperwork
- Local authority records
- Planning and building warrant documents
- Guarantees and invoices
- Previous conveyancing files
- Factoring records
- Utility documents
- Information supplied by relatives or neighbours
The Home Report should generally be available before the property is placed on the open market.
Step 9: Instruct a Scottish conveyancing solicitor
A solicitor is required to carry out the legal conveyancing work involved in transferring ownership of the inherited property. The solicitor will need to establish that the executor has the legal authority to sell and that the title can be transferred to the buyer.
The work may include:
- Examining the property title
- Checking the executor’s Confirmation
- Reviewing the Will and relevant estate documents
- Confirming who must sign the sale documentation
- Reviewing the Formal Offer
- Negotiating the missives
- Answering the buyer’s legal enquiries
- Obtaining required property searches
- Dealing with any secured lending over the property
- Revising the disposition transferring ownership
- Receiving and accounting for the sale proceeds
- Completing the legal transfer to the buyer
When property changes ownership in Scotland, the deed transferring it must be registered in the Land Register of Scotland. Registers of Scotland recommends using a solicitor because land registration requires specialist legal knowledge.
At d and h, our involvement is limited to the legal conveyancing required to complete the property sale. Separate professionals should be instructed for estate agency, surveying, property management, tax advice or physical work at the property.
Step 10: Market the property and consider offers
Once the necessary preparations have been made, the property can be marketed for sale.
The executor is responsible for acting in the interests of the estate. This means offers should be considered carefully rather than accepted solely because one beneficiary would prefer a quick sale.
Factors to consider include:
- The amount offered
- The Home Report valuation
- Whether the buyer has a property to sell
- The buyer’s funding position
- Any conditions attached to the offer
- The proposed date of entry
- The cost and risk of continuing to hold the property
- Whether Confirmation has been obtained
- The views of co-executors and beneficiaries
The highest offer is not always the strongest offer. A slightly lower offer from a buyer who is ready to proceed may be preferable to a higher offer involving uncertain funding or a lengthy property chain.
The executors should keep a clear record of how and why an offer was selected, particularly if there are several beneficiaries.
Step 11: Complete the conveyancing process
After an offer is accepted, the buyer’s and seller’s solicitors negotiate the contract for the sale. In Scotland, this contract is formed through a series of formal letters known as missives.
The seller’s solicitor will examine the title, provide relevant documentation and respond to legal enquiries raised by the buyer’s solicitor.
Additional work may be required where:
- The property is still registered in the deceased’s name
- The property is recorded in the older General Register of Sasines
- Title deeds, or title plans, are missing
- There are outstanding mortgage securities
- Alterations lack supporting paperwork
- The property has access or boundary issues
- There are title conditions affecting its use
- The estate has more than one executor
- The Confirmation does not accurately describe the property
Addressing these matters early can reduce the likelihood of delays after an offer has been accepted.
Step 12: Settle any Capital Gains Tax due
Capital Gains Tax may become payable if an inherited property increases in value between the date of death and the date it is sold.
For example, if the property was valued at £180,000 when the owner died and was later sold for £210,000, the starting gain may be £30,000. Allowable selling costs, improvement expenditure, available tax allowances and the identity of the seller may affect the final taxable amount.
The position may differ depending on whether the property is sold by:
- The deceased’s estate
- An individual beneficiary
- Several joint beneficiaries
- A trust
There is generally no Capital Gains Tax charge when the property is first transferred directly from the estate to a beneficiary. However, the beneficiary may become liable if they later sell it for more than its relevant inherited value.
Where Capital Gains Tax is due on the sale of UK residential property, it will usually need to be reported and paid within 60 days of completion.
Tax advice should be obtained before the sale completes where a significant increase in value may have occurred.
Step 13: Repay debts and distribute the proceeds
Once the sale has completed, the proceeds belong to the deceased’s estate unless the property had already been transferred to a beneficiary. Before distributing the money, the executor must ensure that relevant liabilities and estate expenses have been settled.
These may include:
- A mortgage or secured loan
- Conveyancing costs
- Estate administration expenses
- Inheritance Tax
- Capital Gains Tax
- Property maintenance costs
- Insurance and utility bills
- Other debts owed by the deceased or the estate
Executors should not distribute the full sale proceeds prematurely. If an unexpected liability arises after the money has been paid to beneficiaries, the executor may face difficulties recovering it. The remaining estate can then be distributed according to the will or the applicable succession rules.
Common problems when selling an inherited property
The beneficiaries cannot agree
One beneficiary may want to sell immediately while another wants to retain the property. The executor must follow the Will, consider their legal duties and make decisions in the interests of the estate. Professional advice may be necessary where disagreement is delaying the administration of the estate.
The property is in poor condition
An executor must decide whether repairs are likely to add more value than they cost. Major work may delay the sale and expose the estate to additional risk. The Home Report can help identify the property’s condition and provide an independent valuation.
The property has an outstanding mortgage
The lender should be notified of the owner’s death. The mortgage will normally need to be repaid from the estate or cleared from the sale proceeds before the buyer receives a clear title.
The title deeds cannot be found
Many Scottish properties are now recorded digitally in the Land Register, but older properties may still have paper deeds or be recorded in the General Register of Sasines. Missing title information does not always prevent a sale, although additional legal work may be needed.
The executor lives outside Scotland
An executor does not necessarily need to live in Scotland to sell an inherited Scottish property. However, identity checks, document signing, tax residency and practical property management may require additional planning. Non-UK residents can also have separate Capital Gains Tax reporting obligations when selling UK property.
The property is occupied
The property may be occupied by a tenant, family member or another person claiming a right to remain. The executor should not assume that the occupant can simply be asked to leave. Their legal status and any tenancy or occupancy rights must be established before vacant possession is promised to a buyer.
How long does it take to sell an inherited property in Scotland?
There is no fixed timescale. The process can take longer than an ordinary sale because the executor may need to obtain Confirmation, resolve tax matters, clear the property and establish a marketable title before completion.
The overall timescale will be influenced by:
- Whether a valid Will exists
- How quickly the executor can gather estate information
- The complexity of the Confirmation application
- Whether Inheritance Tax is payable
- The condition and location of the property
- The state of the title
- The property market
- Whether executors and beneficiaries agree
- The buyer’s circumstances
Starting the legal checks early can help identify matters that might otherwise delay the transaction after a buyer has been found.
Do you need a solicitor to sell an inherited property in Scotland?
A Scottish solicitor will be needed to complete the legal conveyancing and transfer ownership of the property to the buyer. Inherited property sales can involve additional legal issues because the solicitor must confirm who has authority to sell, examine the Confirmation and establish how ownership should be transferred from the deceased’s estate.
Early legal advice can be particularly helpful where:
- The property is still registered in the deceased’s name
- There is no Will
- Several executors have been appointed
- The property was jointly owned
- A survivorship clause may apply
- The beneficiaries disagree
- The property has a mortgage or complicated title
- Confirmation has not yet been obtained
- The executor lives outside Scotland
Selling an inherited property with d and h
Selling an inherited property can feel more complicated than an ordinary house sale, particularly when it forms part of a larger estate or several people are involved.
d and h can undertake the Scottish conveyancing required to complete the sale, including examining the title, handling the legal contract, responding to the buyer’s solicitor and transferring ownership on completion.
Our role relates specifically to the legal conveyancing involved in the transaction. Estate agency, surveying, property preparation, taxation and other non-conveyancing services should be arranged separately with suitably qualified professionals.
Contact d and h to discuss the conveyancing involved in selling an inherited house, flat or other property in Scotland.
This guide provides general information only and does not constitute legal or tax advice. The correct procedure will depend on the property title, the terms of the will, the Confirmation and the circumstances of the estate.