Inheriting a home can be a daunting (and stressful!) prospect at the best of times, but doing so at Christmas can present a whole range of additional concerns. Here’s how to handle it…
When a loved one dies, you might expect to be included in their Will and to inherit from their estate. This may come in the form of inheriting a portion of their savings, a prized family heirloom or, as the title of this post would suggest, a residential property.
This can prove to be a blessing and a curse. While, of course, being given a property certainly has its benefits, it isn’t without its difficulties. This is especially the case if you aren’t sure exactly what you want to do with it just yet.
There’s never likely to be a ‘convenient’ time of the year to inherit a home, but there are certainly times which are busier than others – namely, Christmas! In this post, we’ve put together a list of handy tips that you can keep in mind if you are inheriting a home around the Christmas period, whether that’s hiring a solicitor for transfer of equity, or getting your head around the tax that you may need to account for. Be sure to read on below to find out more…
What Makes Inheriting a Home at Christmas So Stressful?
Stress Levels are High Enough Already
This shouldn’t come as a surprise to anyone – Christmas can be stressful! While, yes, you may well receive time off work and have the opportunity to spend some quality time with your loved ones, the immense level of planning that is required to pull the festive season off successfully should never be underestimated.
So, if you’re already battling against a never-ending tide of present shopping, dinner planning and negotiations with awkward family members, the last thing you’ll want is to suddenly inherit a property.
Remembering to put out cookies and milk (or brandy) for Father Christmas can be hard enough in itself!
Money Can be Tight
Christmas always tends to be an expensive few months for many families, as there is so much that needs to be taken care of. Presents are one thing, especially when children are involved, but there are various other expenses that can quickly mount up, leaving some people with very shallow pockets.
That’s why, if you inherit a home at Christmas, it can seem a little overwhelming. If money is already tight, the last thing you’ll want to deal with are some unexpected tax bills, particularly if you have no long-term plans to hold on to the property in the first place.
You May Already Be Dealing with a Bereavement
Significant occasions like Christmas can be incredibly difficult if you’re dealing with a bereavement, as it only serves to remind you of your loss. So, if you’ve inherited a home around the Christmas period because a loved one has passed away, it can be very difficult to handle.
Naturally, everyone grieves differently, and, for some, Christmas may come as a welcome distraction. However, this certainly isn’t the case for everyone, which explains why some people may struggle more than others.
4 Tips for to Make Inheriting a Home at Christmas a Little Easier
So, what can you do to make the process of inheriting a home at Christmas that much easier? Here are some simple tips you should keep in mind…
1. Create a Short and Long-Term Plan
First things first – what do you want to do with the home you’ve inherited? There are various options you can take, so it’s important to set out a clear short and long-term plan you and your family can follow.
In the short-term, you’ll want to set out how you want to assess how probate affects the inherited property. This will include whether there is a mortgage to sort, what tax is due, and transferring ownership.
In the long-term, you’ll have to decide what you want to do with the home. This might include keeping the property for yourself, selling it outright, or renting it out.
2. Take Your Time Where Possible
What you may not realise is that you don’t need to deal with everything associated with an inherited property straight away. Most banks and lenders will be sympathetic to your situation.
For example, inheritance tax doesn’t usually have to be paid for up to 12 months, while most mortgages have a period of grace while you make other arrangements.
So, if the Christmas period is already busy enough in itself, you can delay a few decisions until the new year without receiving any penalties.
3. Get Your Head Around Tax
There are various taxes which will be due on a property if you have inherited it through a Will. It’s important to get your head around them as soon as possible so you understand exactly what you may owe. The three main taxes are:
- Inheritance tax: where the combined value of the estate is worth more than £325,000.
- Capital gains tax: you may need to pay this if you decide to sell the property.
- Income tax: if the property is a buy-to-let or holiday let, you may have to pay income tax when you start receiving income from rent.
4. Speak to a Legal Professional
If you find yourself getting into a muddle over an inherited property, and the Christmas period is adding extra pressure, then don’t hesitate to speak to a legal professional.
You can either speak to a probate or conveyancing specialist (or both!) and they can advise you on your legal obligations, what steps you should take, and at what time.
Are You Worried About Inheriting a Property at Christmas?
So, there you have it! There’s no getting around the fact that inheriting a property at Christmas can be incredibly difficult. But, with proper planning and a little help from the experts, the situation may not be as overwhelming as you first think.
Are you concerned about potentially inheriting a property at Christmas? Or have you had to go through the process in the past? Why not leave a comment below to keep the discussion going.
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained financial or property professional. Be sure to consult a financial or property professional if you’re seeking medical advice regarding your inherited property. We are not liable for risks or issues associated with using or acting upon the information on this site.