If you're reading this because someone close to you has died, we're sorry for your loss. There's no need to read this all at once, and no deadline that requires you to make every decision immediately — the practical steps below can generally wait until you're ready to look at them. This guide covers the process plainly: what happens with probate, what tax may be due, and the options once the property is legally yours.
1. Probate — what it is and why it matters
Probate is the legal process that confirms who has the authority to deal with someone's estate after they've died — including selling or transferring any property they owned. Until probate (or, in Scotland, "confirmation") has been granted, a property generally cannot be sold or formally transferred into the names of those inheriting it, even though everyone may already know who it's intended for.
The process typically takes several months from application to grant, sometimes longer if the estate is complex or if inheritance tax is due before probate can be granted. There's no requirement to rush this — the property itself isn't at any particular risk simply by sitting empty or lived-in during this period, provided it remains insured and reasonably maintained.
2. Inheritance tax on the property
Inheritance tax (IHT) is charged on the value of someone's estate above certain thresholds, not specifically on the property in isolation — the property's value is simply one part of the total estate calculation. The standard nil-rate band is £325,000 per person, with an additional residence nil-rate band of up to £175,000 available when a main home is passed to children or grandchildren, bringing many individual estates' effective threshold to £500,000 before any tax is due. For a married couple or civil partnership, unused allowances can typically transfer between partners, meaning a surviving partner's estate can potentially shelter up to £1,000,000 combined before tax applies.
| Allowance | Amount |
|---|---|
| Standard nil-rate band (per person) | £325,000 |
| Residence nil-rate band (if main home passes to direct descendants) | Up to £175,000 |
| Combined threshold for a married couple (with unused allowances transferred) | Up to £1,000,000 |
| IHT rate on the value above the threshold | 40% |
Any inheritance tax due is generally the responsibility of the estate, paid before assets are distributed — not something that becomes a personal tax bill for whoever inherits the property afterwards. Whether any tax is actually due depends on the full value of the estate, not the property alone, so it's worth getting a proper professional assessment rather than estimating from the property value in isolation.
3. If the property has a mortgage
An outstanding mortgage on an inherited property doesn't disappear — it remains a debt of the estate, and typically needs to be settled (either by repaying it from other estate assets, by the new owner taking over the mortgage if the lender agrees, or by selling the property) before or as part of finalising the inheritance. Contact the lender as soon as is practical to let them know the situation — most lenders have a dedicated bereavement process and won't expect normal payments to continue uninterrupted while probate is being sorted, though it's worth confirming this directly with them rather than assuming.
4. Keep, sell, or rent — the options
Makes sense if the property suits your own needs and circumstances. Be aware of any outstanding mortgage and the ongoing running costs before committing.
Often the simplest option, particularly when inheriting jointly with others who have different needs or preferences. See the Selling Your Home Guide for the process.
Becomes a buy-to-let property with its own tax and compliance obligations — see the Buy-to-Let Hub if this is a genuine option you're considering.
Each option is genuinely reasonable depending on your circumstances, and there's no inherently right answer. Some people find it helpful to live in or keep an inherited home for sentimental reasons even where selling might be the more financially straightforward path, and that's a legitimate choice, not a mistake. Others find it easier to sell quickly rather than living with ongoing reminders, and that's equally legitimate. Take the time you need, and don't let anyone — including financial guidance like this — pressure you toward a particular answer faster than feels right.
5. Capital gains tax if you later sell
If you keep the property for a period and then sell it later, capital gains tax may apply on any increase in value between the date of death and the date you sell — not on the property's full value, and not based on what the original owner paid for it decades earlier. The value at the date of death (the "probate value") becomes your starting point for this calculation, effectively resetting the cost basis. If you sell relatively soon after inheriting, at close to the probate valuation, there may be little or no capital gain to tax at all.
6. Inheriting jointly with siblings or others
Inheriting a property jointly with siblings or other family members is common, and it introduces a genuine practical question: everyone involved needs to agree on what happens next, whether that's selling and splitting proceeds, one person buying out the others' shares, or another arrangement entirely. Disagreements at this stage are common and entirely understandable — people often have different financial circumstances, different emotional attachments to the property, and different timelines they're working with. Where agreement isn't straightforward, a solicitor experienced in estate matters can help structure a fair process, and this is a genuinely normal part of many inheritances rather than a sign that something has gone wrong.
7. Frequently asked questions
How long do I have to decide what to do with an inherited property?
There's no fixed legal deadline forcing a decision once probate is granted. Inheritance tax, if due, generally needs to be paid within six months of the date of death to avoid interest charges, but that's a payment deadline for the estate, not a deadline for deciding the property's long-term future. Take the time you genuinely need.
Do I have to pay stamp duty on an inherited property?
No — stamp duty applies to property purchases, and inheriting isn't a purchase, so no SDLT is due simply on inheriting. Stamp duty would only become relevant again if you later bought a different property yourself, where normal rates would apply based on your own buyer circumstances at that time.
What if I already own a home and inherit another property?
Inheriting a second property doesn't itself trigger a tax charge, but it can affect your position if you later buy a further property — additional-property stamp duty surcharges are based on how many properties you own at the time of a purchase, and an inherited property generally counts. It can also affect your capital gains tax position on your main home in certain circumstances. If this applies to you, it's worth a conversation with an accountant or solicitor about your specific situation.
Continue your research
About the author
✓ Editorially reviewed — all Poqet guides are checked for factual accuracy before publication and updated when UK rates or legislation change. Editorial Policy