Upon the death of a family member, it is often the case clients will suddenly become the owner of a property.
For some, it could be the family home they grew up in, which means the property comes with plenty of memories, be they good or bad.
For others, the property may not be one they have grown up in, but in either instance it could be geographically far from where they currently reside.
Inheriting a property comes with lots of decisions that fall to the beneficiary to make, such as whether the property should be kept as a house, a rental home or sold to another owner.
Or maybe, if the property has been left to multiple members of a family, there will be more than one person making the decision and, potentially, the opportunity to share any financial gains.
The condition of the property when it is inherited may help in the decision-making process.
Research among 2,000 UK adults conducted by bridging lender Market Financial Solutions and published in September last year, revealed 36 per cent were set to inherit a property, which it estimated was equivalent to 18.6m people in the UK.
Its findings coincided with research from Royal London, which estimated that £400bn worth of property will be passed from grandparents to younger generations in the coming decade.
The UK is set to witness a monumental transition of property wealth over the coming decades, according to Paresh Raja, chief executive of Market Financial Solutions.
"Furthermore, the expected value of the property they are due to inherit all or part of comes to an average of £347,500," he points out. "Therefore, it’s important for those who are expecting to inherit a property to properly understand the tax implications and associated costs involved."
Financial advisers should prepare for more questions and queries around property inheritance from clients in the coming years.
So what happens when someone inherits a property?
To start with, the individual or family members who have unexpectedly taken ownership of the property will have to follow a process and bear in mind any tax that may have to be paid upon receipt of the property.
Tony Mudd, divisional director, tax and technical support at St James’s Place, explains there is a formal administration process to follow upon inheriting a house.
“Practically, this involves probate being granted, with the executors thereafter transferring the property to the beneficiary and lodging the change with the Land Registry. The beneficiary now has the choice to retain and rent, to retain as a second property, or sell,” he says.
He suggests any inheritance tax liability would have been settled by the estate prior to distribution.
But Mr Mudd notes: “In the case that there are evident gains by inheriting the property – for example, the difference between purchase price of the property and its subsequent value at death – they would be wiped out on death.