How Does Inheritance Work in England and Wales (2026)? A Plain-English Guide

When a person dies in England and Wales, their assets (their 'estate') pass to other people through one or more of four distinct legal routes — and each route operates independently: (1) SURVIVORSHIP: certain jointly owned assets pass automatically to the surviving co-owner on death — outside the estate, outside any will, outside the probate process. The most common example is a property held as joint tenants: when one joint tenant dies, their interest passes immediately to the surviving co-owner by the right of survivorship. The surviving co-owner updates Land Registry with Form DJP and the death certificate. No probate is needed for that asset. Joint bank accounts also typically pass by survivorship; (2) NOMINATED BENEFICIARIES (PENSIONS AND LIFE INSURANCE): certain assets are designed to pass outside the estate to nominated individuals. Defined contribution pensions (personal pensions, SIPPs, workplace pensions) pay to whoever is named in the member's expression of wishes form — outside the estate, outside IHT (to April 2027), without waiting for probate. Life insurance written in trust pays to trust beneficiaries directly. These assets never enter the estate at all; (3) VIA A WILL (IF ONE EXISTS AND IS VALID): a valid will — signed, dated, and witnessed by two independent adults (Wills Act 1837 s.9) — directs how the estate is distributed. The executor named in the will obtains a grant of probate from the Probate Registry, then collects the estate assets, pays debts and taxes, and distributes what remains to the beneficiaries. The will controls assets in the deceased's sole name only — it does not override survivorship for joint tenancy property or nominations for pensions/insurance; (4) VIA INTESTACY (IF THERE IS NO VALID WILL): if the deceased left no valid will, the Administration of Estates Act 1925 determines who inherits. The statutory intestacy rules apply a fixed distribution formula based on family relationships — surviving spouse first, then children, then other relatives. Unmarried partners, stepchildren (not legally adopted), friends, and charities inherit nothing under intestacy regardless of the length of the relationship; (5) IN PRACTICE — MOST ESTATES USE MULTIPLE ROUTES: a typical estate might involve: the family home passing by survivorship (joint tenancy) directly to the surviving spouse; the pension passing to named children; the bank accounts (sole name) and investments passing via the will through probate. Understanding which route applies to which asset is the starting point of estate administration.

Probate is the legal process of establishing the validity of a will and authorising the executor to administer the estate. The grant of probate is a court document that gives the executor the legal authority to collect in assets, deal with banks and institutions, sell property, and distribute the estate. When probate is needed (and when it is not): (1) PROBATE IS USUALLY NEEDED FOR: (a) Property in the deceased's sole name (banks, building societies, and Land Registry require a grant before releasing assets above a threshold); (b) Stocks, shares, and investment accounts in the deceased's sole name; (c) Any asset where the institution requires a grant before releasing funds; (2) PROBATE IS NOT NEEDED FOR: (a) Assets passing by survivorship (joint tenancy property; joint accounts — confirmed by death certificate only); (b) Pension death benefits (dealt with directly by the scheme trustees); (c) Life insurance written in trust (dealt with directly by the insurer to the trustees); (d) Small estates where individual banks agree to release funds below their internal threshold (typically £50,000 for current accounts — varies by bank) without a grant; (3) HOW TO OBTAIN PROBATE: (a) Confirm the will is valid (signed and witnessed; no revocation events — marriage, divorce, later will); (b) Value the estate (land and property at open market value; investments at mid-market price; savings at date of death balance; personal effects at auction/insurance value); (c) Calculate any IHT due (if estate is above available NRB/RNRB thresholds); (d) Pay IHT (must pay 50% of IHT on non-instalment option assets before probate is granted — the 'IHT chicken-and-egg' problem solved by using estate funds, inheritance advance, or a probate loan); (e) File IHT forms (IHT400 for taxable estates; IHT205 or online HMRC excepted estate declaration for non-taxable estates under the excepted estate threshold); (f) Apply for the grant online or by paper (PA1P for testate estates; PA1A for intestate estates; fee: £300 + £1.50 per official copy); (4) PROCESSING TIME: HMRC typically responds to IHT submissions within 20 working days; the Probate Registry takes 4–8 weeks from application to grant (2026 position); (5) WHAT HAPPENS AFTER PROBATE: executor collects assets; pays debts (funeral expenses; HMRC; secured loans; credit cards in order of priority); distributes interim payments to beneficiaries while final tax position resolves; finalises estate accounts; makes final distributions.

Without a valid will, the Administration of Estates Act 1925 (AEA 1925) and the Intestate Succession (Interest and Capitalisation) Order 2023 determine who inherits. The distribution depends entirely on which relatives survive the deceased: (1) SURVIVING SPOUSE/CIVIL PARTNER AND NO CHILDREN: the surviving spouse or civil partner takes the entire estate. This is the simplest scenario; (2) SURVIVING SPOUSE/CIVIL PARTNER AND CHILDREN: (a) Personal chattels (household and personal effects): spouse takes all; (b) Statutory legacy: £322,000 (updated SI 2023/1416 in force July 2023); interest at 8% per annum from death to payment; (c) Residue: 50% to spouse, 50% to children equally. If a child dies before the deceased but has their own children, the grandchildren take their parent's share per stirpes; (3) NO SURVIVING SPOUSE — CHILDREN ONLY: children take the entire estate in equal shares; (4) NO SURVIVING SPOUSE — NO CHILDREN: estate passes in order of priority: parents (if both surviving, equally); then siblings of the whole blood (and their descendants); then siblings of the half blood (and their descendants); then grandparents; then uncles and aunts of the whole blood (and their descendants); then uncles and aunts of the half blood (and their descendants); then the Crown (bona vacantia) if no qualifying relatives are found; (5) WHO DOES NOT INHERIT UNDER INTESTACY: (a) Unmarried partners — regardless of the length of relationship or cohabitation; (b) Stepchildren — unless legally adopted; (c) Friends; (d) Charities; (e) Estranged family members who were not formally disinherited (they still inherit); (6) CHILDREN'S INHERITANCE — MINOR BENEFICIARIES: if a child is under 18, they cannot receive the inheritance directly. Under intestacy, the estate holds the child's share on statutory trust until age 18 (or until marriage if earlier). At 18, the young adult can claim their share as an absolute beneficiary; (7) THE MORAL: intestacy leaves no control over who benefits and can produce deeply unwanted results — in particular, cohabiting partners receiving nothing while distant relatives inherit. Only a valid will prevents this.

Inheritance tax (IHT) is charged at 40% on the value of a deceased person's taxable estate above the available nil-rate band (NRB) and other reliefs. The executor is responsible for calculating and paying IHT before the estate is distributed. Key rules: (1) WHAT IS INCLUDED IN THE ESTATE FOR IHT: assets in the deceased's sole name; the deceased's share of tenants in common property; assets in certain trusts (depending on type); gifts made within 7 years of death (potentially exempt transfers — PETs — which are added back); (2) WHAT IS EXCLUDED: assets passing by joint tenancy survivorship to the surviving co-owner (value added to survivor's estate, not taxed on first death); assets passing directly to a surviving spouse/civil partner (spouse exemption — IHTA 1984 s.18 — fully exempt between UK-domiciled spouses); DC pension death benefits paid directly to beneficiaries (until April 2027); life insurance in trust paid directly to trust beneficiaries; (3) KEY THRESHOLDS 2026: nil-rate band (NRB): £325,000 per person (frozen to April 2030); residence nil-rate band (RNRB): £175,000 per person where a qualifying home passes to direct descendants (taper above £2m; disappears at £2.35m); transferable NRB and RNRB: first spouse's unused percentage transfers to the survivor — combined couple threshold up to £1,000,000; (4) THE 40% RATE: charged on the taxable estate above all available bands and exemptions; the reduced rate of 36% applies if at least 10% of the net estate passes to charity; (5) PAYING IHT: IHT on most assets must be paid before probate is granted; IHT on land and buildings (including the family home) can be paid in 10 annual interest-free instalments (IHTA 1984 s.227); (6) IHT ON LIFETIME GIFTS: outright gifts to individuals are PETs — exempt if the donor survives 7 years; taper relief reduces the rate on gifts made 3–7 years before death; gifts into trusts are immediately chargeable lifetime transfers (CLTs) at 20% above the available NRB (or 40% if the donor dies within 7 years); (7) APRIL 2027 CHANGE: unused DC pension death benefits will form part of the IHT estate from 6 April 2027 under Finance Act 2024.

The timeline from death to final distribution depends on the estate's complexity, but here is a typical sequence: (1) IMMEDIATE STEPS (WEEK 1–4): register the death (within 5 days in England); obtain multiple certified copies of the death certificate (10–15 copies — banks, pension providers, HMRC all require originals or certified copies); notify HMRC, DWP, pension providers, banks, and insurers; arrange the funeral (expenses are a priority debt of the estate); locate the will and identify the executor; (2) ESTATE VALUATION (WEEKS 2–8): value all assets: contact banks and building societies for date-of-death balances; obtain a RICS property valuation; obtain share/investment valuations; identify all debts; (3) IHT (WEEKS 4–12): complete IHT forms (IHT400 for taxable estates; online excepted estate declaration for non-taxable); pay IHT on non-instalment option assets (must be paid before probate is granted — use Direct Payment Scheme for bank accounts); wait for HMRC to issue the IHT421 (Form 52) confirming receipt — typically 20 working days; (4) PROBATE APPLICATION AND GRANT (WEEKS 8–20): apply for grant of probate online or by post (PA1P); pay £300 fee plus copies; wait for the Probate Registry to issue the grant — currently 4–8 weeks from application; (5) ESTATE ADMINISTRATION (MONTHS 3–9 TYPICALLY): collect in all assets using the grant; sell property and investments; clear all debts; resolve any HMRC income tax issues for the year of death; settle estate income tax for the administration period; (6) DISTRIBUTIONS TO BENEFICIARIES: make interim distributions as assets are collected; produce estate accounts showing all receipts and payments; make final distributions after all liabilities are resolved; (7) COMPLEX ESTATES — LONGER TIMELINES: IHT disputes with HMRC; property sale delays; contesting a will; missing beneficiaries; overseas assets; business interests — all can extend the process to 18 months, 2 years, or longer. There is no legal deadline for completing estate administration, but beneficiaries can make a claim after the 'executor's year' (12 months from death) if the estate is unreasonably delayed.