Your situation
Stamp duty and inherited property
Receiving a home under a will is free of purchase tax. The cost appears later, when you buy a home of your own while still holding the inherited one.
Checked by Radif Partners · Editorial policy · How we calculate
Inheriting a house or a share of one carries no SDLT, LBTT or LTT, because nothing is paid for it, and HMRC requires no SDLT return. The inheritance matters on your next purchase. If you still own the inherited property at the end of completion day, you may own two dwellings, and a £320,000 home then costs £22,000 in England instead of £6,000. England, Northern Ireland and Wales soften this: a share of 50% or less, counting a spouse’s share with yours, is ignored for 3 years after you inherit it. Scotland is stricter, since an inherited dwelling counts for the 8% ADS, £25,600 at that price; since 1 April 2024 it is ignored if received between contract and completion, or if your share is worth less than £40,000. Inheriting a home also ends first-time buyer status for good, which costs a £400,000 buyer in England £5,000 of relief.
Does your inherited share trigger the surcharge?
SDLT on your purchase, England or NI
£6,000
| Inherited share ignored (SDLT and LTT)? | Yes, 50% or less |
| LTT in Wales | £5,700 |
| LBTT + ADS in Scotland if the share counts | £31,200 |
Assumes the share is your only other dwelling. In Scotland the share does not count if it is worth less than £40,000; then LBTT alone is £5,600.
The inheritance itself is tax-free
Purchase taxes are charged on what a buyer gives in exchange for land. A beneficiary under a will gives nothing, so when the executors transfer a house or a share of one to you, there is no consideration and no tax, in any of the three nations. HMRC lists property received under a will among the transfers that need no SDLT return at all. Executors who sell the house to a third party are a different case: the buyer of the house pays the tax in the ordinary way.
The cost of inheriting appears in two other places. It can make your next purchase an additional-property purchase, because you own the inherited home, and it ends your status as a first-time buyer, because you have now owned a dwelling. Both effects are permanent features of the rules rather than of the inheritance, and both can be managed with timing.
England and Northern Ireland: the 50% and 3-year rule
The higher rates of SDLT apply when a buyer will own more than one dwelling at the end of completion day. A share of an inherited dwelling would normally count. HMRC makes an exception, set out in its manual at SDLTM09795: a share of 50% or less, inherited in the 3 years before the purchase, is ignored. The share is measured together with any share held by your spouse or civil partner, because the couple is one unit for these rules. After the 3 years, the share counts like any other property you own.
| Share inherited | SDLT / LTT test | England & NI | Wales | Scotland if it counts |
|---|---|---|---|---|
| 25% | Ignored | £6,000 | £5,700 | £31,200 |
| 50% | Ignored | £6,000 | £5,700 | £31,200 |
| 75% | Counts | £22,000 | £21,950 | £31,200 |
| 100% | Counts | £22,000 | £21,950 | £31,200 |
The table assumes the buyer otherwise owns nothing, or is replacing a main residence. A buyer who keeps a home of their own and buys another is on the higher rates whatever the inherited share, because the home they keep triggers them anyway.
Siblings sharing a parent’s house
Three siblings inheriting a house in equal shares each hold a third, which is under the limit. Each of them can buy a home within 3 years without the inherited house pushing them onto the higher rates. Two siblings sharing equally are each exactly on the line at 50%, which is still ignored. A sole heir with the whole house is over the limit from the start and needs to sell before completing on a home of their own to stay on standard rates.
Buying out a co-heir
The inheritance is free, but a later deal between heirs is not. A sister who pays her brother £150,000 for his half of their mother’s house is buying a share of a dwelling, and that price is chargeable like any transfer of equity: £500 of SDLT at standard rates in England, £100 of LBTT in Scotland and £0 of LTT in Wales. Any mortgage she takes over is added to the price, and her other property may bring the surcharge into play, which her conveyancer checks on the facts.
Wales follows the same rule
The Welsh Revenue Authority applies the same treatment to Land Transaction Tax: an inherited share of 50% or less is ignored for the higher rates for 3 years. Because Wales has its own higher-rates table, the price of failing the test is different: on a £320,000 purchase the higher rates cost £21,950 against £5,700 at the main rates. Wales has no first-time buyer relief, so the second effect of inheriting does not arise there (LTT higher rates).
Scotland: inherited homes count for the ADS
Scotland has no 50% rule. An inherited dwelling counts as one you own when you buy another, and the Additional Dwelling Supplement of 8% of the whole price applies unless the purchase replaces your main residence. Two changes from 1 April 2024 have softened this:
- A buyer who inherits between the conclusion of missives and the date of entry is relieved from the ADS on that purchase, so a death during a transaction no longer changes its tax.
- A share of a dwelling worth less than £40,000 is disregarded when counting what you own, which takes small inherited fractions out of the calculation.
Outside those cases, the supplement on a £320,000 purchase is £25,600. It is refundable only if the purchase replaced your main residence and that residence is sold within 36 months; selling the inherited property later does not bring it back.
The first-time buyer relief you lose
England’s relief, and Scotland’s smaller one, require every buyer never to have owned a dwelling anywhere. Inheriting a share, however small, counts as owning one, and so does a home received as a gift. Selling the inherited share quickly does not restore the status. For a buyer at £400,000 in England, the loss is £5,000; in Scotland it is at most £600. The first-time buyer guide has the full definition.
Timing your purchase after an inheritance
- Find out your exact share and, in Scotland, its value. The figures decide whether the inherited home counts.
- If the share counts, compare the surcharge with the cost of selling the inherited property first. In England a sale completed on or before the day you complete keeps you on standard rates.
- In England and Wales, note the date you inherited: the 3-year protection for small shares runs from it, and a purchase after the period ends is tested on the full rules.
- Do not count on a refund later. Selling inherited property after completion does not unlock a repayment, because the refund is tied to replacing a main residence.
Gifts and transfers inside the family follow different rules again; the exemptions guide lists the transactions that carry no tax at all.