inherited house - best to sell or rent

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    inherited house - best to sell or rent

    Hi all,

    My father sadly passed away in February, I already owned half of his house as tenants in common via my mothers will (passed several years before), although I didn't live there with him. Have my own house nearby. I am sole beneficiary of his will, and as well as everything else, I have contacted LR and asked them what I need to do-they sent me an email with a link to the forms I needed and I have sent them off to remove his name from the deeds, remove the restriction, leave me as sole proprietor etc. Everyone is telling me I should rent out my home and move in to his, saying it's a no brainer. There are no mortgages involved.

    But my brain, which is feeling a bit the worse for wear at this stage, is a bit confused. The rules and regulations, quite apart from the tax situation, seem overwhelming, it's obviously not from a professional landlord/tax expert point of view, but, being neither, I can't quite get my head around what I've read so far. Do you rent out yourself, do you use an agency, do you employ a tax accountant to do your tax return? Always been PAYE (and am on a low salary) so never had to worry about doing tax.

    I presume that if I sold his house I would have to pay CGT on the difference between the price I inherited both halves at at date of death and the sale value. Minus my CGT allowance. Is there a basic guidance anywhere where I can get an overall introduction in basic English to the renting out/tax scenario please?
    Many thanks, sorry for the waffle.

    ADVICE -- serious advice.
    Sell the house

    You did not wake up one day and decide you will be a landlord and want to deal with people that dont pay rent and costs you a fortune to get them out. Nor waking up and sayng I realy want to go through that mine field of rules and regulations that have to be adheared to before you can let a home.

    The WORST possible thing to do is be an "Accidental" landlord, which you are - sort of.

    Don't do it, Get that money on the sale of the house, and put it in the bank.
    My family home just got sold, and I am now very comfortable, more than before.
    Yes I do have rental properties, and some in U.S.A. as well. BUT, all the rent does is pay the mortgage and repairs, lost rent on change overs ( 2 months ) and paying me back, slowly the cost of house purchace expenditure

    Don't do it... ESPECIALLY if you are, as you say, you are a low salary, which means any problems,
    1) you have to get the place up to scratch before you can let it - where does that money come from.
    2) you have to employ solicitors ( may be ) if you have difficult tenants who wont pay rent.
    3) if YOU don't get it right, and have as near as perfect house as possible, tenant can contact the council, who may make you fix any faults you were not aware of.
    4) You are on a low wage, and the last thing you want is to have to pay all above.

    But -- do it if you wish, but in current climate, many landlords are selling up, as getting out none paying tenants is getting increasingly hard, - so they are selling up -- research it...


      Before you think of renting it, get an EPC (energy performance certificate) and an eicr (electrical installation condition report) carried out and gsc (gas safety certificate). If it's a modernish house you should be ok as regards the EPC but if not bear in mind the government is aiming to get all private rentals to a C rating in the not to distant future. This may be almost impossible to achieve without spending thousands . You need the EPC to market the property either way.
      Plus I echo what's said above re bad tenants etc.


        At the cost of being chastised. ( and not directing my comments to 1600e, but a general statement. )

        Landlords "Let"
        And tenants "Rent"./ rent it.


          As there is no mortgage you can make a useful income from it but it certainly isn't hassle free. If you do it yourself it's vital you know what you're doing so you need some landlord training. You are never off duty. If you use an agent you need to make sure they know what they're doing. Anyone can set up as a LA, no knowledge required, but if anything goes wrong it's you, not them, who is liable. You need all the checks as above and you need a certain amount in the bank to cover repairs. Doing a tax return is the least of your worries. You'll make more from letting it than you'll get from the bank but being a LL isn't for everyone, there's never been a worse time to be a LL and you need to go into it with your eyes open. The housing market is strong atm but may not be in the future.


            Originally posted by ram View Post
            At the cost of being chastised. ( and not directing my comments to 1600e, but a general statement. )

            Landlords "Let"
            And tenants "Rent"./ rent it.

            Quite right.
            I was rushing to post as the footy was starting lol!


              Morning all,

              Many thanks for the replies, Ram I appreciate what you are saying and it is indeed a prospect of too many pitfalls to contemplate really and seems easier (and lazier) to just sell. So can I just check, if I move in to my Dad's house (now mine, currently held as a second property) ) and put my current house on the market (for sale) would I then not pay any CGT on the profit, if any I make on it as i have been using it as my main residence for the last 3.5 years since I bought it. So then the new house will be classed as my main (only) residence going forward. Is that correct? Either way it's going to be a bit of a nightmare; the other place is full of a lifetime of my mothers hoarding. Even if I did it the other way round and stayed here and sold my Dad's place, it would be a major undertaking to empty the place. Then there's my own stuff too.

              Give me strength...............


                CGT is payable on any gain that arises, with any period when the property was your main residence being tax free.
                So you're going to have a small amount of time for one of the properties you now own, because you can't live in two places for tax purposes anyway.

                Usually there's no tax to pay because most properties don't accumulate more than the £12,300 personal allowance in the period of joint ownership.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).



                  Thank you for that. Well, I presume HM would see my current house as my main residence for tax purposes, unless I ask them to change that to the second house. In which case I would have to pay CGT at 18% on whatever profit I have made on the sale price from when I bought it. I would have to pay more tax on the second home if/when I sell it, as it would have been more of an increase between me taking over half of it when Mum died, and inheriting the second half now.

                  I contacted Land Registry to ask them what I had to do in the circumstances and they sent me an email with a link to all the forms I needed which I double checked with them, and I duly filled them in and sent them off, writing in the boxes where necessary that the reason was I had inherited the second half as my fathers only beneficiary, (there were no questions about the value). I have received an updated title registration document in the post today, however, although it has removed my Dad's name leaving mine as sole proprietor, and taken the restriction off, it has left the value as only what my mums half was when it was transferred to me, (the last time the deeds were updated obviously), would that mean if/when I sell it I would have to let the solicitor know what the value of the second half had been when I inherited it (from the probate forms). To get the tax right?

                  Sorry for the extra question.

                  Thank you.


                    Sell both, buy 1 bigger home for yourself ….that’s what I would do


                      Originally posted by Wobble1 View Post
                      Morning all,

                      Many thanks for the replies, Either way it's going to be a bit of a nightmare; Even if I did it the other way round and stayed here and sold my Dad's place, it would be a major undertaking to empty the place. Then there's my own stuff too. Give me strength...............
                      CGT is shown in post 8 ( i am no expert in CGT )

                      Even if you let a house, it still has to be cleared of EVERYTHING, YES EVERYTHING. maybe even furnished with furniture that has stickers on saying fire proofish. empty cupboards, dressers, under the stars, garage, potting shed, tidy the garden, clean pathways of alge ( how ever you spell it ) paint the place, service the boiler, test gas and electrics, clean all carpets ( £ 500 if never been done before if all house carpeted ) new matress to all beds ( and hoping not to upset you- people wont want to sleep on a matress that someone may have died on ) fix ALL the faults you find.

                      You can let your hown house have defective heating, electrics, tap drips, windy whisleing windows and doors, slip on on alge ridden flags and steps, injure your self, even kill yourself via dodgy electrics and pathways. BUT you are not allowed to kill your tenants with the same

                      The lesser of the work you have to do is item number 3

                      1) Clear both houses, and go live in fathers.
                      2) Clear one house and have the HASSLE of letting it, + all maintenence costs for two houses, none rent payers, and have MORE than enough money to get dads house legal, and info above on letting a house.
                      3) Clear one house, sell it, and have Thousands in the bank

                      My family home sale got me a Porsche, and another better very new everyday car, ( never buy new as you lose £ 5000 imediately driving it out of showromm if you keep it for 12 months.) Paid of all my debts ( normal ones -- not properties as thats a business arrangement )

                      If you decide to let, you WILL be strapped for cash due to all above. Is that what you want ( i didn't think so ) as that is what you will be -- cash strapped. it's all money going out which you wont have You say "on a low salary" -- the DON'T do it.

                      I started a company on £ 300 from my back bedroom while unemployed. Then 7 years later - still im my bedroom but in sanother county, and a spell in hospital due to overwork, -- later the oposition bought me out as i under cut them all. Then I went into the home rental business BECAUSE I HAD THE MONEY then after the sale, which you don't have.

                      Also remember. you will only have ONE customer every twelve months and if one does not pay you - you are farqued. I could afford for 10 customers not to pay me, I had so many in 12 months.

                      Anyway -- your choice.
                      Your forth choice is a combination of number 2 and borrow £ 6000 repayable over 2 years to sort out one house to let and rent will pay you back. but you have some money coming in to repay the loan, but allow 2 months concentrated effort to get house in order and at most 2 months before a paying tenant arrives.

                      But option 3 is your best, then enjoy the money ( saving some for when you no longer work afte age 65 )


                        1. If you decide to sell father 's house now, the capital gain will come mainly from your own half share .

                        If the capital gain on your half share is around £50K , the cgt tax may be around £50K less £12K allowance = £38K at 18% = £7K .

                        The capital gain on the half share from father in Feb 2021 should be Nil. So don't be afraid of selling father's house.

                        2. If you decide to sell your current house , there is exemption of capital gains tax for own residence. So No tax to pay.


                          If you want to keep both houses and rent out one house, you should visit 3 local estate agents and make enquiries with lettings manager :
                          to check out the following info :

                          1. What is the rental demand for property in your district or street area ? flats or houses ? furnished or unfurnished ? what is the monthly rent ?
                          2. What is the normal rental period under AST agreement ? 6 months or one year ?
                          3. What is the waiting time for a finding a tenant ?
                          4. What is the charge finding tenant only ? what is the charge including rent collection and management ?

                          Assuming you choose to give the estate agent to find tenant under full management for one year, you will get 12 monthly statements showing the rental income and expenses. you can pay a tax return agent to complete your annual tax return for around £150.


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