WillSafeUK

Stamp Duty on Inherited Property UK: Do You Pay SDLT?

Updated: 16 May 2026 • Reading time: 7 min

Inheriting a property in England brings potential tax questions — but Stamp Duty Land Tax (SDLT) is generally not one of them at the point of inheritance. SDLT is a transactional tax triggered by chargeable acquisitions, and an inheritance under a will or intestacy is not a transaction for these purposes. However, owning an inherited property can affect SDLT on your future purchases — sometimes significantly.

No SDLT on Inheriting Property

When you inherit a property under a will or the intestacy rules, there is no SDLT to pay. SDLT applies to “chargeable land transactions” — broadly, purchases and acquisitions for consideration. An inheritance passes property without consideration, so no SDLT liability arises at that point.

The estate may have IHT to pay (depending on the value of the estate and available reliefs), but SDLT is entirely separate from IHT and does not apply to the inheritance itself.

The 3% Higher Rate Surcharge

Where the inherited property matters significantly is the 3% surcharge(from October 2021: 5% on top of standard rates from 31 October 2024 for purchases completing on or after that date — check current HMRC rates) for additional dwellings. This surcharge applies when a buyer already owns one or more dwellings at the end of the day of purchase.

If you inherit a property and then buy another home while still owning the inherited property, you may be liable for the higher rate SDLT on your purchase. This can add a substantial sum — for example, on a £400,000 purchase the surcharge alone could be £16,000 or more.

Main Residence Replacement Exception

There is an important exception: if the property you are buying is replacing your main residence (which you have sold or are selling on the same day), the surcharge does not apply even if you also own an inherited property. The test is whether the purchase is a replacement of your main home.

Minor Share Inherited Properties

HMRC’s published guidance has indicated that where a person inherits only a minor share of a dwelling (36% or less), this may not trigger the surcharge on a later purchase. This reflects a pragmatic recognition that a small inherited share should not penalise families buying their first or next home. However, HMRC’s position on this can change, and specialist SDLT advice is recommended before relying on it.

Buying Out Other Beneficiaries

If a property is inherited by multiple beneficiaries and one beneficiary wishes to buy the others out, this is a chargeable land transaction. The buying beneficiary pays SDLT on the consideration paid for the shares they acquire. If they already own other property, the higher rate surcharge will apply.

Planning the timing of this transaction can be important — if the buyer does not yet own other property (or sells their main home before completing the buyout), the standard rates apply rather than the surcharge.

Surcharge Refunds After Selling an Inherited Property

If you paid the higher rate surcharge on a new purchase because you owned an inherited property at the time, and you subsequently sell the inherited property within three years of your new purchase, you can claim a refund of the surcharge from HMRC. The claim must be made within:

Whichever is the later applies. The refund claim is made by amending the original SDLT return. Missing this window means the surcharge is lost permanently.

SDLT and Deeds of Variation

When a deed of variation redirects an inherited property to a new beneficiary, this is generally not a chargeable transaction for the person giving up the property (as there is no consideration received). However, if the new recipient already owns a property, they may trigger SDLT on the acquisition of the redirected property if there is consideration — for example, if they pay anything in return.

The IHT read-back under section 142 IHTA 1984 does not provide any SDLT relief, so SDLT consequences of any variation must be assessed separately. Always take specialist advice when varying a property inheritance.

Scotland and Wales

SDLT does not apply in Scotland (Land and Buildings Transaction Tax — LBTT) or Wales (Land Transaction Tax — LTT). Both have their own higher rate surcharges for additional dwellings and their own rules on inherited property. The principles are broadly similar but the rates and thresholds differ.

Frequently Asked Questions

Do you pay stamp duty when you inherit a property?

No — there is no Stamp Duty Land Tax (SDLT) on inheriting property. SDLT is a tax on land transactions, which means it applies only when there is a chargeable acquisition — a purchase, transfer for consideration, or certain lease transactions. Inheriting property under a will or intestacy is not a chargeable transaction, so no SDLT is payable at the time of inheritance.

Does inheriting a property affect the 3% SDLT surcharge on future purchases?

Yes, potentially. The 3% higher rate for additional dwellings applies when a buyer already owns one or more dwellings at the end of the day of their new purchase. If you inherit a property and later buy another home while still owning the inherited property, the 3% surcharge may apply to your purchase. However, if the inherited property is your only home and you are replacing your main residence, relief may be available.

Is there a time limit for the additional dwellings surcharge after inheriting?

HMRC's guidance confirms that an inherited property counts as an additional dwelling for SDLT purposes from the date probate is granted. However, if you own only a minor share of an inherited property (36% or less of the total), HMRC previously took the view that this does not trigger the surcharge — though this treatment is subject to change and specialist advice should be taken.

What if I buy out other beneficiaries' shares in an inherited property?

If you buy another beneficiary's share of an inherited property — for example, paying a sibling for their half-share — this is a chargeable land transaction and SDLT may be payable on the consideration paid. If the total consideration exceeds the SDLT threshold, SDLT is calculated on the amount paid. The additional dwellings surcharge may also apply if you already own another property.

Can I claim a refund of the SDLT surcharge if I sell an inherited property?

If you paid the 3% surcharge on a new main residence purchase because you owned an inherited property at the time, and you subsequently sell the inherited property within three years of your new purchase, you can claim a refund of the surcharge. This must be claimed within 12 months of the sale (or within 12 months of the filing date for the new purchase, whichever is later).

Is there SDLT on a deed of variation that redirects an inherited property?

A deed of variation made within two years of death that redirects an inherited property to a new beneficiary can trigger SDLT if the new beneficiary already owns property. The read-back under s.142 IHTA 1984 applies for IHT purposes but does not provide SDLT relief. Each redirection of property under a deed of variation should be checked for SDLT consequences by a specialist.

Plan Your Property Inheritance

A well-structured will can specify how property is to be dealt with on death, avoiding unnecessary complications and tax costs for beneficiaries. WillSafe helps you create a will that takes your property interests into account.

Get started with WillSafe