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Inheritance Tax Planning for Probate Properties | IHT Avoidance

Inheritance Tax Planning for Probate Properties | IHT Avoidance

How to Minimise Inheritance Tax when Selling Probate Properties and Properties for Inheritance Pre-Death?

Inheritance Tax Planning for Probate Properties | IHT Avoidance – In the previous two articles, we discussed the different ways in which inheritance tax can be minimised and how trusts can be used to reduce inheritance tax. In this article, we will explore different examples on how one can practically use that information to reduce inheritance tax when it comes to selling probate properties post-death and selling properties intended for inheritance pre-death.

Scenario 1

Assuming you are married, the best method to avoid inheritance tax for your family is to gift all your assets to your spouse in your Will. We would also advise you to keep the property on your sole name, as opposed to on a joint name, to avoid further tax if your spouse decides to sell the property after your death. This is because inheritance tax will be 100% exempted upon death and capital gains tax on the sale will be calculated based on the value of the property on the date of the transfer, as opposed to on the date of which you have bought the property yourself. It is, therefore, crucial to offload the probate property as soon as the probate process is finished to make sure that the sale does not exceed the capital gains tax allowance.

Scenario 2

Assuming you do not have a spouse but you do have direct descendants (children or grandchildren), you may opt to write a Will whereby your direct descendants will inherit your main residence to take advantage of the main residence allowance of up to £150,000 for the 2019/20 tax year or £175,000 for the 2020/21 tax year. After the probate property title is successfully transferred to them, they may then sell the property and limit their capital gains tax payable due to the change in acquisition cost to the value on the day of transfer, as in the case for scenario 1. Assuming the property value has not risen above the capital gains tax allowance from the date of transfer to the date of sale, capital gains tax and inheritance tax would have been fully minimised. Again, it is vital to sell the probate property as soon as it is legally possible to ensure that the gains do not exceed the capital gains tax allowance.

Scenario 3

Assuming you are substantially above the inheritance tax allowance and have the intention to leave cash for your family after death, it is worthwhile to consider offloading up to £325,000 of your property portfolio prior to your death and to transfer the proceeds into the trust every 7 years. This will ensure that your inheritance tax allowance will be fully utilised and thus minimise overall tax payable. The capital in the trust can then be used to invest into the stock market, investment funds or even back into properties with high rental yield. Beneficiaries will then only be subjected to income tax, which is significantly lower than inheritance tax. If you are worried that your family may not have sufficient liquid cash to pay off any potential inheritance tax liability, it is worth considering to take out a whole-of-life insurance within the trust to cover any inheritance tax payable upon death.

Inheritance Tax Planning for Probate Properties | How can Auction Agent, your local property auction house, help you?

We, Auction Agent, are experienced property auctioneers with extensive local property knowledge for your area. Auction Agent has unparalleled knowledge against their competitors when it comes to properties based in Burnley, Blackburn, Accrington, Rossendale, Nelson, Bacup, Rawtenstall, Blackpool, Clitheroe, Preston, Bury, Bolton and Lancashire. With our traditional auction method, Auction Agent can ensure that lots sold on our property auction platform will complete anywhere from as little as one day to an absolute maximum of 28 days. Auction Agent has a combined experience of over 50 years within the UK property market – we can most certainly answer any property questions you have, whether you are looking to sell a house, buy a property or just curious about property auctions in general. Auction Agent property auction house utilises all the leading online property portals including Rightmove, Zoopla, and PrimeLocation, as well as social media platforms like Facebook, Twitter, and LinkedIn, in order to maximise the exposure of your property to potential bidders. Furthermore, with our extensive database of cash-ready property investors, you can rest assured that your property will get all the attention it deserves from high-conversion buyer leads.

Let Auction Agent help you in dealing with your probate property today with our incredibly easy and convenient property auction selling process and buying processcontact us for an extensive probate property valuation report for your inheritance tax report to the HMRC.

Do you have probate property near Turbary Woods Owl and Bird of Prey Sanctuary, Avenham and Miller Parks, Preston Guild Wheel, Brockholes Nature Reserve, Harris Museum and Art Gallery, Barton Brook Dairy, Cuerden Valley Park, Bowland Wild Boar Park, British Commercial Vehicle Museum, Beacon Fell Country Park, Preston Railway Station, Lancashire Infantry Museum, Ribchester Roman Museum, Preston Docks, St. Walburge’s Church, Deepdale Stadium, Claylands Park, Preston Guild Hall & Charter Theatre, The River Ribble, West Lancashire Railway, Preston Bus Station, Haslam Park, Fishergate Shopping Centre, Covered Market, Winckley Square Park, Beer Brothers Brewery, Miller Arcade, Giddy Kids, Stydd Gardens, Rufford Old Hall, The Walled Garden, The Barn, Leyland Market, Longton Brickcroft Nature Reserve, Withy Grove Park, Smithy Farm, Brindle Distillery, Hurst Grange Park, Moor Park, Preston Cenotaph, The Preston Martyrs Memoria, Lower Kem Mill, St. John’s Minster, Preston Minster, Preston Playhouse Theatre, Fishergate Bollard, Church Cottage Museum, St. Paul’s Warton, The Old Corn Mill Antiques Centre, St. George’s Shopping Centre, Preston City Trampoline Club, Ladyewell, St. John’s Shopping Centre, St. Mary’s Fernyhalgh, Barton Grange Garden Centre, The Flower Bowl Entertainment Centre, Monkey Magic, Brig N Barrel, Sweets & Treats, Cann Bridge Ale House, The Black Bull Inn, Northcote Cookery School, The Grapes, Stanley House Spa, The Bee Centre, Shores Hey Farm, Towneley Hall, The Singing Ringing Tree, Gawthorpe Hall, Turf Moor, St. Peter’s Church, Pendle Hill, Pendle Heritage Centre, Animal Quackers, Whalley Abbey, Liv Spa, Burnley Mechanics, Angel Inn, Reel Cinema, Rosehill House Hotel, Sparth House Hotel, Mercure Blackburn Dunkenhalgh Hotel & Spa, Astley Bank Hotel, Northcote Hotel, Woodland Spa, Helmshore Mills Textile Museum, Whitaker Museum, Grundy Art Gallery, The New Philly Family Bar, Escape Room Centre, Marton Mere Local Nature Reserve, Opera House & Winter Gardens, Dino Mini Golf, Ascent Trampoline Park, Blackpool Zoo, Fleetwood Market, Sandcastle Waterpark, Blackpool Pleasure Beach, Coral Island, Madame Tussauds Blackpool, Blackpool Tower, or Pine Lake Resort?

For a comprehensive probate property valuation on your inherited property in Bolton, Bury, Burnley, Blackburn, Accrington, Rossendale, Nelson, Bacup, Rawtenstall, Blackpool, Clitheroe, Preston, Lancashire or any other area in the BL0, BL1, BL2, BL3, BL4, BL5, BL6, BL7, BL8, BL9, BB1, BB2, BB3, BB4, BB5, BB6, BB7, BB8, BB9, BB10, BB11, BB12, BB18, BB94, PR0, PR1, PR2, PR3, PR4, PR5, PR6, PR7, PR8, PR9, PR11, PR25 or PR26 postcodes, contact Auction Agent today on 01706 940499, or visit

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Inheritance Tax Planning for Probate Properties | IHT Avoidance

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