Death, Estates and Stamp Duty

The Inheritance Exemption

When the executors pass a property to a beneficiary under a will or the intestacy rules, that is a land transaction, but it is exempt. Schedule 3 paragraph 3A of the Finance Act 2003 (assents and appropriations by personal representatives) exempts it as long as the beneficiary gives nothing in return for the property, and taking over a mortgage on it does not count as giving something.

Because the transaction is exempt, there is no SDLT return to file and no tax to pay. This applies regardless of the property value. A £5 million inherited estate is just as exempt as a £100,000 one. The size of the estate, the number of beneficiaries, and the value of each individual share all make no difference to the stamp duty position.

The exemption applies equally across all UK nations:

• •England and Northern Ireland: No SDLT on inherited property
• •Scotland: No LBTT on property passing under a will or intestacy
• •Wales: No LTT on inherited property

For a comprehensive treatment of inheritance and its downstream effects on property tax, see our detailed inheritance impact guide, which covers first-time buyer status, minority shares, and deeds of variation.

Executor Obligations

Executors acting as personal representatives do not pay stamp duty in that capacity. Transferring property from the deceased's estate to a beneficiary under the terms of the will is a land transaction, but the same Schedule 3 paragraph 3A exemption applies, so no tax is due and no SDLT return is needed.

The grant of probate process does not involve any stamp duty obligation. Executors apply for probate to obtain the legal authority to administer the estate, but this administrative step does not trigger any land tax. The subsequent transfer of property from executor to beneficiary is similarly exempt.

In the rare situation where the estate itself needs to purchase property, for instance to satisfy a specific bequest that requires acquiring an asset, normal SDLT rules would apply to that purchase. But this is not typical estate administration.

If an executor sells estate property to a third party, for example to raise cash to pay inheritance tax or to satisfy pecuniary legacies, that is a standard sale. The buyer pays SDLT in the normal way, and the executor acts as vendor. The executor has no personal SDLT liability in this context; the SDLT falls entirely on the purchaser.

Impact on Future Purchases

The SDLT consequence of inheriting property is not at the point of inheritance. It is at your next purchase. Once you inherit a beneficial interest in residential property, you are treated as a property owner for SDLT purposes. This creates two distinct risks for your next transaction:

• Loss of first-time buyer relief: Inheriting any share of a residential property anywhere in the world means you have previously owned property. You can no longer claim first-time buyer relief, which charges nothing on the first £300,000 and 5% on the slice from £300,000 to £500,000, and is unavailable altogether once the price exceeds £500,000.
• Additional dwelling surcharge: If you still own your inherited property (or your share of it) when you buy another property, the 5% surcharge may apply to the entire purchase price of the new property. Whether the surcharge is triggered depends on the 50% beneficial interest rule and the 3-year disregard window, covered in the sections below.

A key distinction to understand: the loss of first-time buyer relief is permanent. Selling the inherited property later does not restore FTB status. By contrast, the surcharge exposure is forward-looking, as what you own at the time of each future purchase determines whether the surcharge applies at that point.

For the full position on stamp duty on inherited property, including whether you pay SDLT on the inheritance itself and how an inherited share affects a later purchase, see our dedicated answer.

What to Tell Beneficiaries About Inherited Shares

Beneficiaries often ask the executor whether their share will cost them stamp duty later. In short: a share of 50% or less, counting a spouse's or civil partner's share in the same property, is ignored for the 5% surcharge for three years from the date it passes to them. A larger share counts straight away. Any share, however small, ends first-time buyer status for good.

The three years run from the date the executor transfers or appropriates the property to the beneficiary, not from the date of death. Point beneficiaries to the 50% rule and 3-year window explained for worked examples.

Buying a Probate Property

Buying a property from a deceased estate, whether at auction, through a probate sale, or via an estate agent, attracts normal SDLT at the standard rates. There is no discount, relief, or exemption because the vendor happens to be an estate rather than a living individual.

The SDLT calculation is straightforward: you pay based on the purchase price, using the same rate bands as any other residential purchase. If you are buying as an additional dwelling (because you already own property), the 5% surcharge applies. If you are a first-time buyer purchasing a probate property as your only property, first-time buyer relief applies in the normal way.

Probate properties are sometimes sold below market value, as the estate may accept a lower offer to achieve a faster sale, avoid the costs of maintaining a vacant property, or distribute funds to beneficiaries sooner. A below-market purchase reduces the SDLT bill proportionately, since SDLT is calculated on the actual consideration paid, not on market value. But this is a market dynamic, not a tax relief, and there is no statutory discount for buying a probate property.

Use our stamp duty calculator to check the SDLT due on any probate property purchase, including where the higher rates apply.

Scotland & Wales

Scotland: LBTT and ADS

Scotland applies the same inheritance exemption under Land and Buildings Transaction Tax (LBTT). Property passing under a will or intestacy is an exempt transaction, so no LBTT return is required. There is no tax to pay on the inheritance itself, regardless of property value.

The Additional Dwelling Supplement (ADS), 8% since 5 December 2024 and 6% before that, does not copy the SDLT rule. There is no 50%/3-year disregard for an inherited share. Instead, a share in a jointly owned dwelling is ignored for ADS only if its market value is less than £40,000 (LBTT Act Schedule 2A paragraph 17); a share worth £40,000 or more counts straight away, however it was acquired. There is a separate relief if you inherit a dwelling after entering into the contract for your new purchase but before it completes (Schedule 2A paragraph 9B). Do not assume the SDLT rule carries across the border.

Use the Scotland LBTT calculator to check the tax due on purchases in Scotland, including where ADS applies.

Wales: LTT

Wales applies the same inheritance exemption under Land Transaction Tax (LTT). Property passing under a will or intestacy is an exempt transaction, so no LTT return is required.

The higher rates on additional residential properties in Wales (the LTT equivalent of the surcharge) also follow similar rules. Wales mirrors the SDLT position: a share of 50% or less is disregarded for three years from the inheritance. Beneficiaries who inherit more than 50%, or who still hold a smaller share more than three years on, will be subject to the higher LTT rates on their next residential purchase in Wales.

Use the Wales LTT calculator to check the tax due on purchases in Wales, including where higher rates apply.

Key point: consistent treatment across the UK

All three regimes exempt the inheritance itself. The downstream effect differs: in England, Northern Ireland and Wales it turns on how large a share you inherited and whether you still hold it three years on, while in Scotland it turns on whether your share is worth £40,000 or more.