Can majority rule in selling an inherited property?

Written by judy brown
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Can majority rule in selling an inherited property?
Selling the family home may be the fairest solution. (Matt Cardy/Getty Images News/Getty Images)

Sharing an inheritance can be more problematic than it sounds. Where there is more than one beneficiary, the will maker may want to divide the assets in equal portions. If the main asset is a home, the heirs may all too easily disagree over what to do with it. One beneficiary may want to go and live in the property. Another might prefer to sell it immediately to raise cash, or let it to a tenant for rental income.

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Choosing to sell

Selling may seem the simplest solution, as it enables you to convert the asset into cash and divide it up fairly. It may also draw a line under your bereavement, so you can move on in life. HM Revenue and Customs point out that if you have to pay inheritance tax or pay off debts on the estate, you may have to sell the house in order to meet these costs. However, selling may also involve costs, such as capital gains tax, stamp duty and estate agents’ fees.

Choosing not to sell

You may want to keep the property in the family by living there yourself. You will need to ask whether this is fair to the other beneficiaries, or whether they could have a bigger share of the other estate assets in compensation. You should consider what to do with your current home, and bear in mind the extra household bills, removal costs, maintenance and council tax you may have to deal with.

Choosing to let

Becoming a landlord would give you a regular income while keeping the property as an investment for the future. However, it would also make you responsible for managing the tenancy, paying for maintenance and repair, and paying council tax and income tax as appropriate. If the property has existing tenants, they will have certain legal rights. You must come to an agreement with them and will need professional advice from a solicitor.

Disputes

You may need to find out whether the property is held in trust with conditions attached about who should live there. Also find out whether anyone else could claim an interest because, for example, they had contributed financially to buying or maintaining it.

Ultimately, the beneficiaries will need to agree, among themselves or with mediation, whether to sell or keep the property. They may accept a majority decision, but the usual principle governing the sale of inherited assets is based on fairness and compensation. This depends partly on the nature of the property, who has used it most in the past, and whether there are any existing written agreements about what should happen to it.

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