Inheriting a property with a mortgage

[Crescenter]

Hi,

I have inherited a property that has a mortgage on it(probate still pending)

Can I net the outstanding mortgage against the value of the property for inheritance tax purposes; ie house value - less outstanding mortgage=amount liable for tax.

Sorry if this question has been asked before... tried searching but to no avail!

 

[Brendan Burgess]

Yes. You are only inheriting the net proceeds.

But has the lender approved you to take over the mortgage? That would be very unusual.


Brendan

 

[Luternau]

Its an interesting situation.

Will the mortgage be paid by a life policy/protection policy? If so, then you inherit a debt free property. If not...

Would you really want to take on a mortgage? Could you afford to do so? Would it be beneficial to so? That would seem odd anyway-would the bank not have a lien on the propery that would mean it would vest with them if you could not pay the outstanding sum?

 

[Crescenter]

Unfortunately no life assurance in place so we're inheriting the debt also, however there are only 2 yrs left on the mortgage and it is manageable.

The bank did contact us but only to say that payments are due to be reactivated in Sept and could we provide DD details. Have to say I was rather shocked how casual they seemed to be about it - no mention of any documentation/name changing or anything!

I am currently awaiting a response from them in relation to changing the name on the mortgage so we shall see if this might lead them to ask for some documentation... probate isn't actually completed so maybe once that is done they'll be looking for some info on our financial status?