Conveyancing Solicitors are regularly asked to act on the sale of properties when it turns out that the owner has died. In such cases they have to advise that before the sale can be completed a Grant of Probate of the Will must be obtained. (If the deceased did not leave a valid will, then Letters of Administration have to be obtained, but the procedure is much the same. )
If a buyer has already been found, then it will be desirable to obtain a grant as quickly as possible, otherwise the sale may fall through. Conveyancing Solicitors can always advise about this, but remember that the costs for obtaining a grant are not included in any quote for conveyancing costs.
When a house or land forms part of a deceased owner's assets then Conveyancing Solicitors recommend that an application for a grant is made even if there is no immediate intention of selling. If the property title is already registered at the land registry then the executors can have their names registered, or otherwise transfer title to a beneficiary, making it easier and quicker to complete any subsequent sale.
The procedure for obtaining a Grant is relatively straightforward, since it is a case of following a number of rigid steps, and it can take between four and six weeks. However, it is difficult to say exactly how long it will take as each case is different, and much will depend upon the nature of the assets which the deceased owned.
Where the deceased passed away leaving a small number of assets and with no Inheritance Tax (IHT) to pay, it should take only a month to six weeks for Probate to be granted if there are no complications. http://www.hmrc.gov.uk/inheritancetax/
Applications are made to the Probate Registry, which has a number of district offices around the country.
Conveyancing Solicitors can always assist with Probate applications, but if the house was the only asset of substance then it is often quite straightforward for a personal application to be made without the need to instruct a Solicitor. Further information can be obtained from the Probate Registry – they have a number of local offices throughout the country which can give further advice.
Compiling a list of assets and their value
For all applications a schedule of the deceased's assets and their value must be completed. Values are taken at the date of death, so if that was some time before a property is sold, or if no buyer has yet been found, it will be necessary to obtain a professional valuation as at the relevant date. Otherwise an existing sale price can be used.
Evidence of the value of other assets (other than cash) may be required, although it is not usually necessary to obtain a detailed valuation of normal household effects unless there are items of significant value. Any outstanding debts, together with funeral expenses, are deducted from the gross value of the estate for the purposes of calculating tax.
Applications where no IHT is payable
See the website of HM Revenue and Customs for current information on tax rates and thresholds. If no tax is payable then a short form IHT 205 will need to be completed, and an Oath for Executors or Administrators will also need to be submitted. The IHT 205 does not have to be submitted to HM Revenue & Customs but can be sent directly to the Probate Registry.
On average it takes a week to ten days for applications to be processed by deal with the Probate Registry, as long as there are no queries raised or complicated matters involved. Probate in this scenario should take 4 to 6 weeks.
Where there is Inheritance Tax to pay
If IHT is payable because of the value of the assets the procedure will take somewhat longer, as a much longer tax return (IHT 400) has to be completed together with numerous supplementary pages, depending on the nature of the assets. This will usually require professional assistance. The form must then be sent to HM Revenue and Customs who will send a request for payment of tax to the Executors. Once IHT is paid, HM Revenue & Customs will issue a stamped form confirming receipt of payment. The stamped form is then sent to the Probate Registry Office for the Grant of Probate to be issued. Sometimes, in order to save time, Solicitors will submit the Probate application with a covering letter stating that the stamped confirmation of payment of tax from HM Revenue & Customs will be submitted shortly.
Matters that can cause delay:
- Dealing with an Estate where the deceased was domiciled abroad (note that a full tax form, IHT 400, must be completed despite the size of the estate)
- If an executors lives abroad – this will cause delay since the IHT form and Oaths must be signed by them personally so all documentation must be sent abroad.
- Dealing with an Estate where there is an intestacy and several people may be entitled to apply
- Where there are difficulties in locating assets
- Where there are a number of shareholdings - each company must be contacted and then a share valuation will need to be obtained
- Where an Executor or Administrator wishes to give up their right to be an Executor or Administrator so another needs to be appointed in their place
- Where a deceased spouse’s unused nil rate band is to be used – there will be additional work since the deceased spouse’s solicitor must be located and contacted and details from their Esate must be included in the deceased’s IHT 400 form. In practice, this can cause great delay.
- Where the deceased made lifetime gifts and these need to be verified
- Problems getting together funds to pay IHT (note that IHT can be paid in instalments over 10 years where land /property is involved, however, but the entire balance becomes payable as soon as the land/property is sold)
If you are appointed as an Executor (or entitled to act as an Administrator) of an estate it is important to familiarise yourself with the procedures involved during the Probate process and make sure you collate all the necessary documentation and information quickly so as to avoid unnecessary delay.
If you are intending to sell a property get a quote now for Conveyancing Solicitors or phone 0330 660 0286