What Happens When You've Inherited Property Between Siblings?

If you’ve recently inherited a house or flat with your siblings, you no doubt have a lot of questions. Firstly, we’re sorry for your loss. The passing of a loved one, especially a parent or grandparent, can be a difficult and stressful time. 

As co-founder and CEO of The Property Buying Company (TPBC), I have seen my fair share of property sales from siblings with inherited property. While inheritance can be a gift in many ways, shared inheritances, particularly material assets like property, can add to the stress. Over the past 30-plus years, I’ve learned that as a buyer I can help reduce the burden by providing clear and informed selling routes for those still grieving. 

In an ideal world, you and your siblings will be on the same page when it comes to dealing with inherited property. However, this is often not the case. Most of the time, inheritance disputes focus on the actual will. As the Guardian reports, these disputes have hit record numbers in England and Wales, with upwards of 10,000 people arguing over will each year. Almost 50% of these disputes are between siblings, easily the most common, according to Dutton Gregory Solicitors.  

Many who go through these disputes describe them as “emotional torment” and “really gruelling” or talk about heartbreaking family fallouts. “She was my best friend [when I was younger],” Holly McIntosh said of her stepmother when talking to the Guardian about a fallout over inheritance. “We don’t speak at all now … Is it really worth breaking up your family for a bit more money?”

That’s the big question though, isn’t it. How much is it worth? The answer isn’t simple and many siblings are in very different financial situations when they inherit shared property. 

You may be happy to sit on the property and wait for its value to increase, maybe rent it out for a bit of extra cash in the interim. However, your sister or brother may be in need of money now and want to sell. Another sibling may be tired of renting and now want to live in your old family home where they have fond memories. 

As you can see, inherited property can quickly go from being a blessing to a curse, with lengthy and emotionally exhausting disputes causing a lot of stress and heartache. Fortunately, there are ways to deal with inherited property split between siblings that can help mitigate this stress and emotional turmoil. 

We’re going to cover all your avenues, from selling your share to buying a sibling out and even applying for an Order to Sell. We’ll also look at some other important aspects of inheriting shared property, including inheritance tax, stamp duty and capital gains tax. 

Table of Contents

• You’ve just inherited property with your siblings... What happens next?

• Should you become joint tenants or tenants in common with your siblings?

• Selling as a joint tenant versus tenant in common

• Inheriting a house with a mortgage

• Tax implications for inherited property shared between siblings

• How to sell inherited property that’s shared between siblings when only you want to sell

• How to sell inherited property that’s shared between siblings when everyone wants to sell

• Can you force the sale of property you’ve inherited with siblings?

• Should you use a cash house buying company to sell your property?

You’ve just inherited property with your siblings... What happens next?

Firstly, it’s very unlikely that you’ll have access to the property immediately after your loved one has passed. You will have to wait until probate is complete, which is where the executors of the person’s will settle any outstanding debts before handing over the remaining inheritance. 

Probate has been a notoriously slow process in the past, with people waiting upwards of 12 weeks. However, according to the UK Government, wait times dropped to just over four weeks in December 2024. This increase in speed is due to the government clearing backlogs after Covid-19, recruiting extra staff and moving to a more digital process (about 80% of all applications are now done online). 

Once the property has been handed over to you and your siblings, you’ll need to communicate openly and honestly about what you’d like to do with it. There are various routes you can take here, but each one requires different levels of cooperation and communication with your sibling or siblings. 

For example, if you’re not on speaking terms with your brother or sister, you both may want to simply sell the house and move on. If you have healthy relationships with your siblings and you’re all in agreement, you could rent it out for some extra income. It all depends on your specific situation, including individual wants and needs. 

“Inheriting a property jointly can often lead to tensions where the two owners have very different ideas about what should happen next,” writes Louise Low, solicitor at Blandy & Blandy. “Because the property is owned jointly, both owners have to agree before anything can be done with the property. If the property is empty, one may want to move in and live there or let it out so as to produce an income or sometimes to try to develop the site whilst the other may simply want to sell.”

Here are some of the actions you can take with inherited property:

Below is an estimation of how long each option will take after probation. Keep in mind that 5.5 months is the average sale timeline of property on the open market, based on recent data from the UK Government and Zoopla. 

This timeframe can be a lot shorter if you sell via auction (8-12 weeks) or to a professional cash buyer (2-3 weeks). 

Joint tenants versus tenants in common

Before you can decide what you’d like to do with your inherited property, you and your siblings will need to choose how you want to jointly own the house or flat. In the UK, you can choose to own the property as either joint tenants or tenants in common. This decision is very important as both options offer different ownership rights. 

To help you decide which one is best for you, here’s a breakdown of joint tenancy versus tenants in common when they relate to siblings who’ve inherited property.   

Option 1: Joint tenants

As joint tenants, you and your siblings will own the property together as a single entity (in the legal sense). That means you’re all entitled to the same share (i.e. the entire property) and if one sibling dies, the other sibling/s inherit their share. 

You can’t bequeath your share to another friend or family member in your will – it can only be passed on to another sibling until the final sibling passes away. At that point they can choose to pass it on to someone else in their will. 

Option 2: Tenants in common

With tenants in common, you and your siblings own individual shares of the inherited property. These shares are split either evenly or by specific percentages. For example, if you have three siblings, you may all have an equal 25% stake in the property. Or you may choose to own specific shares, such as a 20:20:40:20 split. 

Why would you choose to own less than your sibling? Well, you may want to be less responsible for repairs and homeowner costs (e.g. council tax), as these must be covered according to each owners’ share. 

Should you become joint tenants or tenants in common with your siblings?

The answer to this question depends entirely on your specific situation and relationship with your siblings. 

Joint tenancy is the better choice if you have a good, trusting relationship with your brothers and sisters. It can also make the process of selling the property a lot simpler if that’s the route you want to take. 

Tenants in common may be a better choice if your sibling relationships aren’t strong. This route can protect your share in the property and also give you the freedom to bequeath it to someone else in your will (not just your sibling/s). It’s also a good option if you all plan on keeping the property and renting it out. If you want less responsibility and lower costs of being a landlord, you can opt for a smaller share in the property.

Selling as a joint tenant versus tenant in common

We have a great article covering this topic if you want to know the ins and outs of selling as a tenant in common versus as a joint tenant. In a nutshell, it’s a lot easier to sell your share of the property as a tenant in common. If you’re a joint tenant, you’ll need all owners to agree to the sale for you to sell. 

According to Stowe Family Law, if only one joint tenant wants to sell, they can apply for severance of the joint tenancy, changing it to a tenant in common agreement. A joint tenant and tenant in common can also force the sale of a property by requesting a court order for sale under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA). However, this process can be very time consuming and expensive. You’ll also need a very strong case to get court approval. 

Inheriting a house with a mortgage

If the deceased was still paying off a mortgage loan on their home, the process is going to be slightly more complicated. The deceased’s life insurance can usually pay off the mortgage in one go, but that may incur an early repayment charge. 

If the life insurance policy doesn’t pay off the mortgage, other assets in the estate may be used to pay it off. If, after probate has ended, the loan is still standing the debt will be passed on to the benefactors (i.e. you and your siblings). However, while not paying the mortgage could result in repossession, you’re not legally required to pay it off. 

“If the property is in negative equity or you’ve no means of making repayments, you can’t be forced to repay the mortgage. In this situation, it is well worth talking to a solicitor as well as the mortgage provider to stand a better chance of finalising the situation in a way that suits you,” says Hayley Rees-Jones, senior associate solicitor at Howells.

If you want to start making payments on the mortgage, you’ll need to contact the lender to get the mortgage transferred into your or your sibling’s name. You can also sell a house with a mortgage, which can help you pay off the debt. You’ll have time to make this decision. 

According to Farrer & Co, “In most cases lenders, especially those with internal policies governing the death of a borrower, will stop requiring such payments from the date they are informed of the death until they receive evidence of the Grant of Probate but interest may continue to accrue until the loan is fully repaid.”

It’s always a good idea to contact the mortgage lender early on and discuss the specific ins and outs of the loan. There may be clauses unique to the lender in the case of death.

Tax implications for inherited property shared between siblings

Inheriting a significant asset, such as property, always presents a number of tax considerations. If you’ve inherited property and are sharing it with your sibling or among multiple siblings, you’ll need to pay close attention to three taxes. Some, all or none of these may apply depending on your situation. 

1. Inheritance Tax

The most recent guidance from the UK Government states that the “standard Inheritance Tax rate is 40%.” Inheritance Tax isn’t typically taken directly from the beneficiaries (i.e. you and your siblings). Instead, it’s paid using funds from the estate, usually within six months of someone dying. 

You will only need to pay Inheritance Tax (IHT) if the value of the estate exceeds the £325,000 threshold. However, this threshold can increase to £500,000 if property is left to children (including stepchildren and adopted or fostered children) and the total estate is worth less than £2 million.

This additional threshold is thanks to the main residence nil-rate band of £175,000, which benefits direct descendants of the deceased. So you could be entitled to it if you’re inheriting property from a parent or grandparent. Spouses and civil partners can also transfer any unused IHT allowances to their surviving partner. That means in some cases this tax-free threshold can max out at £1 million. 

Still confused about the residence nil rate band? You can use the UK Government’s online tool for calculating the nil rate band depending on your specific circumstances.

Scenario 1: Lowest tax-free threshold

You and your siblings have inherited a house worth £480,000, but your mother’s total estate is worth £2.2 million. 

You will not be entitled to the nil-rate band, meaning you will have the lowest tax-free threshold of £325,000. That means you will need to pay 40% Inheritance Tax on the value of the property above £325,000 (i.e. £155,000). 

You will be taxed £62,000 for the property, in addition to the Inheritance Tax taken from the remaining value of the £2.2 million estate.

Scenario 2: Highest tax-free threshold

You and your siblings have inherited a house worth £525,000, which is the total value of your father’s estate. 

You will be entitled to the nil-rate band and the highest tax-free threshold of £500,000. That means you will only need to pay 40% Inheritance Tax on the value of the property above £500,000 (i.e. £25,000). 

You will be taxed £10,000 for the property. 

Important: Reduced Inheritance Tax rate

The estate may be entitled to a reduced rate of 36% instead of 40%. This is usually only granted if the deceased has left at least 10% of their estate to charity. You can use the UK Government’s official Inheritance Tax rate calculator to determine if you are entitled to this reduced rate.

2. Capital gains tax

Capital gains tax (CGT) isn’t always required and certainly isn’t taken when you first inherit property. You will only need to worry about CGT if you and your siblings decide to sell the house. You may also need to pay it if you sell your share of the property in a tenant in common scenario. If you all decide to keep the house to live in or rent out, you won’t need to pay CGT. 

This tax is only applied if the property has increased in value between the time of your inheriting and selling it. The official guidance from the UK Government is: “Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.”

You must report any gains from the property sale within 60 days of selling it. You only have to report your gains from the sale, not the total profit. So if you’ve inherited a house with three other siblings and have split the profits evenly, you only need to report your 25% share in those gains. Your siblings will need to report their gains separately. 

The UK Government also provides an up-to-date list of the CGT rates and allowances for individuals. In the 25-26 financial year, you can claim a tax-free threshold of £3,000. Your CGT rate will either be 18% or 24% depending on your overall tax bracket. 

Top Tip: Read our guide on ways to reduce or avoid capital gains tax entirely. The most common route is proving the residence is your main home. However, there are other ways to cut down on the amount you have to pay.

Scenario 1: Lowest CGT rate

You and your sister inherit a house worth £350,000. You both decide you want to sell your house quickly and choose a professional cash buyer to facilitate a good sale fast. 

By the time you’re ready to sell, the market has fluctuated and its value has increased. You end up selling it to a cash buyer for £370,000. You split the proceeds from the sale equally with your sister. 

You’ve both made £10,000 in capital gains, which you need to declare within 60 days of the sale. You’re a basic-rate income taxpayer and are entitled to the £3,000 tax-free threshold. 

You would need to pay 18% CGT on the £7,000 profit, which ends up being £1,260 in tax. 

Scenario 2: Highest CGT rate

You inherit a house with your three siblings. You decide to divide ownership equally and wait to sell when the housing market has improved. After one year, the property’s value has increased from £260,000 to £340,000. You sell the house for 100% of its market value and split the proceeds equally. 

You and your three siblings have each made £20,000 in capital gains. Unfortunately, you are a high-rate income taxpayer and have also sold a painting within the same financial year, making £3,000 in profit from the sale. 

Your £3,000 tax-free threshold will be used on the capital gains from the painting sale and you’ll need to pay 24% CGT on the full profit of £20,000 from the house sale. This ends up being £4,800. 

3. Income tax

Income tax will only be applicable if you and your siblings start earning income from the property. If you all decide to keep the house or flat and let it out to renters or use it as an Airbnb holiday home, you will need to declare your share of the income every year in your annual tax return. 

The UK Government offers a “property allowance” to landlords up to £1,000 each financial year. According to the government’s official guidance, you’ll need to report your income from the rental property with a Self Assessment if it’s above:

• £2,500 after any expenses

• £10,000 before you work out expenses

Income tax will be charged at the usual rate of your tax band. If you earn under £50,270 that will be 20%, while anything higher will be 40% or 45% depending on your total earnings. It’s not uncommon for people to move from the 20% rate to the 40% rate due to additional income from a rental property. 

You can claim numerous expenses to reduce your taxable earnings. According to the UK Government, for residential properties these deductions include:

• Buildings and contents insurance

• Accountant fees

• Legal fees

• Marketing fees

• Utility bills

• Repairs and maintenance

Important: Letting Relief

If you sell the house after renting it out for some time, you will usually have to pay capital gains tax. However, you may be able to apply for Letting Relief that could reduce or avoid CGT entirely. 

Income tax example: 

You and your sister inherit a one-bedroom flat in London from your mother. You both decide to keep the flat and rent it out for £1,200 a month. Within the 25-26 financial year, you have renters paying you for eight months, totalling £9,600 in income from the property, which you split evenly with your sister.

You have also shared the expenses evenly, which total £2,000 for the financial year.  

You have earned a total of £3,800 (£4,800 minus £1,000 in expenses) from the rental property. However, you have a full-time job in marketing that pays £50,000 a year. Your total personal income for the 25-26 financial year is £53,800. 

According to current UK tax-rate bands, you will pay:

• 0% tax on the first £12,570

• 20% tax on the next £37,699

• 40% tax on the remaining £3,530

This means that from your initial income of £3,800 from the property, you will be taxed £54 on the £270 that falls into the lower tax bracket, then you will be taxed £1,412 on the remaining £3,530 that takes you into the higher bracket. 

Your total earnings from the rental property after tax will be £2,334. 

4. Stamp duty

You will not have to pay stamp duty when you inherit the property. However, according to the HMRC’s Stamp Duty Land Tax Manual, you may have to pay stamp duty if you buy out your sibling’s share in the property at a later date. However, certain conditions need to be met for stamp duty to apply. For example, you’re less likely to pay stamp duty if you don’t already own another property.

Stamp duty example:

You inherit a house worth £300,000 with your brother and split ownership evenly. You decide to buy out your brother and pay for his share (£150,000) in cash. There’s no mortgage on the house and you don’t need to take out a mortgage to do this. However, you already own a flat so this would be your second property. 

In this scenario, you would need to pay the stamp duty rate for additional properties, which is 3% up to £250,000. You would end up paying 3% of £150,000, which comes to £4,500 in stamp duty. 

Important: Mortgage debt implications

If you’ve inherited a house with a mortgage and want to buy out your sibling, you may also need to pay stamp duty on their portion of the mortgage. So if the house has an £80,000 mortgage, you may have to pay stamp duty on £40,000.

How to sell inherited property that’s shared between siblings when only you want to sell

There are various ways to sell inherited property. The route you take depends on whether all owners wish to sell or only you do. If you’re the only owner who wishes to sell, you have two options: 

1. Sell your share to your siblings

Selling your share of the property to your siblings is probably going to be the easiest of the two options. For one, you may be able to sell it privately and not have to worry about legal and estate agent fees. If your sibling/s have the required capital, you can agree on a price and proceed with the sale. 

However, before you agree to a sale price, you should get the property valued by an RICS-accredited surveyor. The Royal Institution of Chartered Surveyors upholds the highest standards in property valuation, so you can rest assured the market value will be accurate. You can search for members of the RICS online. 

This process can drag out if your sibling needs to secure a mortgage loan to purchase your share. There are ways around this, such as establishing a private agreement where they pay you over a series of months or years. However, you would need to make sure this is formalised to avoid any legal disputes in the future. 

2. Sell your share to an external party

If you have a tenants in common agreement, you can sell your share of the property to an external buyer. As Jema Thaker, property law associate for Osbornes Law, writes, “Since the ownership is separate, each person can act independently when making decisions about the property. For example, they can sell or mortgage their own share without consulting the other owners.” 

You won’t need your other siblings to agree to the sale. However, this route can be more time consuming and expensive. You may have to use the services of an estate agent, pay for legal and surveyor fees, and wait a long time to find someone willing to buy only a portion of a property.