What Happens When You Inherit a House from Your Parents? 2026 Guide
Estimated reading time 15 minutes
Inheriting a house from your parents can be both emotionally overwhelming and financially complex. Whether you’re considering keeping, renting, or selling the property, it’s crucial to understand the tax implications and legal responsibilities in 2026.
Who inherits a property if there is no will?
Property inheritance can feel confusing and scary, especially if there’s no will. The rules for who inherits are determined by intestacy law, which typically prioritises the spouse and children. If there are multiple children, often the property will be split equally between all siblings. If there is just one child, usually they will be the sole heir. Whatever the situation, there will be important legal and financial steps to follow.
Can a partner inherit the property if not married or in a civil partnership?
Generally, no. When there is no will, the below people are typically unable to inherit:
- Unmarried partners: if they lived with the deceased without a marriage or civil partnership, they have no right to the estate.
- Relations by marriage: in-laws are not able to inherit property. This includes all in-laws such as sisters, brothers, or even distant cousins.
- Close friends: friends of long- or short-standing are not able to inherit if there is no will.
- Carers: while they live with and take care of the deceased, they are not qualified to inherit the property. This is against the law.
Probate and the Grant of Letters of Administration
When someone passes away, their estate (including money, property, and possessions) must be handled according to UK inheritance law. If the deceased did not leave a will, this process is known as “administration,” and you will need to apply for a Grant of Letters of Administration to gain legal authority to deal with their estate.
This legal document gives you the right to access the deceased’s assets, settle any debts, and distribute the estate according to the rules of intestacy.
Who can apply for the Grant of Letters of Administration?
If there is no will, the following people may apply:
- A surviving spouse or civil partner (first priority)
- The deceased’s children (if there is no spouse or partner)
- Other close blood relatives, in order of priority (parents, siblings, etc.)
The person who applies becomes the administrator of the estate. If multiple people are entitled to inherit, up to four administrators can apply jointly.
How is probate different?
Probate is the general term used for the legal process of administering an estate. If a will exists, the executor named in the will applies for a Grant of Probate. If there’s no will, a Grant of Letters of Administration is issued instead.
Even though the names are different, both processes serve the same purpose: giving someone legal authority to manage the deceased person’s estate.
You may not need to apply for probate or letters of administration if:
- The total value of the estate is below £5,000–£10,000 (but you will need to check with individual banks for the exact amount).
- The assets are held in joint names and pass automatically to the surviving owner (e.g. joint bank accounts or a jointly owned property).
- The deceased had no property, land, or shares.
However, each bank or institution may set its own limit. Some may release funds up to £50,000 without probate. Always check with the relevant organisation first.
2026 Update: Is there a new probate threshold in the UK?
As of 2026, there is no fixed estate value threshold set by the UK government for when probate is required. However, many financial institutions have raised their internal limits.
Here are general guidelines for 2026:
| Institution Type | Likely Probate Threshold (2026) |
| Banks / Building Societies | £20,000 – £50,000 |
| NS&I | £5,000 |
| Jointly owned property | Usually passes automatically |
| Property in sole name | Probate is always required |
It's recommended to contact each bank, lender, or asset holder to determine whether they require probate before releasing funds.
Who is legally allowed to handle the estate?
The only ones who have a legal right to deal with the estate of the deceased are:
- Deceased’s spouse
- A child of the deceased
However, before these individuals are able to deal with the estate, they must first apply to the Probate Registry for a Grant of Letters of Administration. You can do this on your own or hire a solicitor to apply on your behalf.
The grant makes you the administrator of the estate. What’s more, the document contains essential information that includes proof of building societies, banks, and other organisations you can access. This gives you the right to distribute funds that belonged to the deceased. Unfortunately, it’s also possible you may have to pay part or all of the inheritance tax that may be due on the estate before being issued the grant.
This entire process is referred to as “obtaining probate,” even though there is no will.
Do you have to obtain a grant of letters of administration?
No, not always. For instance, you may not need a grant if the value of the deceased’s estate is under £10,000 and does not include land, property, or shares.
You also won’t need a grant if the estate is held jointly, and the surviving joint owner will assume full ownership. This may happen, for instance, if one sibling buys out the other sibling’s share in the home.
More information can be found by visiting the GOV.UK probate guidance page.
Who can inherit the deceased’s estate if there’s no will?
If there’s no will, who can inherit the deceased’s estate? The law has rules that govern who will inherit an estate.
There is a surviving spouse of the deceased
If you’re married and your partner dies, then all their property is transferred to you. This can include a pension, property, car, and other assets included in the estate. This also applies when you’re separated from your spouse but are not legally divorced.
The deceased was unmarried or their partner was already deceased
In most cases, the estate should pass to the closest blood relative. This means that a surviving child or children to the deceased automatically inherits the home. If there are no children, the estate may go to the deceased's parents, then siblings, then more distant relatives such as nieces, nephews, or grandparents, following the legal order of intestacy. If there are no blood relatives, then the government takes over the home.
There’s a surviving spouse and children
If the deceased leaves both a surviving spouse and children, inheritance is governed by intestacy rules. The surviving spouse has the first claim, often receiving a statutory legacy (currently £322,000 in England and Wales) plus all personal possessions. Any remaining estate above this amount is usually split, with half going to the spouse and the other half divided among the children. This means that the children can only inherit from the portion of the estate that exceeds the statutory legacy.
If the estate is smaller than £322,000, the spouse could inherit the entire estate and the children might not receive anything.
The deceased has surviving children but no spouse
If there’s no will, then the children collectively inherit the estate before dividing it amongst themselves. This can lead to disagreements if some people want to sell but others do not. To resolve any issues, inheritors must go through careful negotiation, mediation, or take legal guidance to ensure the estate is divided fairly.
If the deceased’s children are stepchildren, adopted or from a previous relationship
In this case, the law makes it clear that children in these relationships qualify to inherit their deceased parent’s home. However, in the case of stepchildren, you can only inherit the house if there’s a will that includes legal documentation that proves your adoption status. In addition, the child must be at least 18 years of age before they may claim the inheritance.
The deceased has no surviving relatives
In this case, the estate becomes “vacant goods” or “Bona Vacantia.” When this happens, the Treasury Solicitor may take over the home and sell it, passing the money on to the Crown.
Do you pay inheritance tax on a parent’s house?
When you inherit a home, whether you pay inheritance tax will depend on the total value of the estate, including the property and other assets. Inheritance tax is currently charged at 40% on the portion of the estate above the £325,000 nil-rate band.
However, most people can benefit from the Residence Nil-Rate Band (RNRB). This can add up to £175,000 to the tax-free allowance when a home is passed to direct descendants (i.e., children or grandchildren). This means that in 2026, a parent’s estate could pass up to £500,000 tax-free to their children (the standard £325,000 allowance plus the £175,000 RNRB). The RNRB reduces gradually for estates worth over £2 million and only applies if the property is inherited by direct descendants.
The amount of the allowance you can have depends on how much the house is worth. For a home over £175,000, you have the full allowance. This means you pay inheritance tax on anything above £500,000 (£325k + £175k). For a home valued under £200,000, you may not have to pay tax on the extra £25,000 unless you also inherited assets worth over £300,000.
If you’re in England or Wales, you must pay inheritance tax on the deceased person’s estate if it is over the threshold. In addition, you may be required to pay the tax on savings, stocks, and potential pensions.
| Scenario | Inheritance Tax Owed? |
| House below threshold | No |
| House + estate above threshold | Yes |
| Joint ownership with surviving spouse | Possibly not |
| House gifted over 7 years ago | Maybe exempt |
When do you pay Inheritance Tax?
Inheritance tax is due 6 months after the end of the month in which the person died. For example, if the person died in March, payment must be made by 30th September.
Late payment will result in interest being charged from the due date until the tax is paid in full.
Who is responsible for paying Inheritance Tax?
The executor (if there is a will) or administrator (if there is no will) is legally responsible for ensuring that the inheritance tax is paid to HMRC. They must do this before distributing the estate to beneficiaries.
However, in some cases, especially with property, the executor can choose to pay the tax in instalments over 10 years, though interest will still accrue on the outstanding balance.
It's worth noting that beneficiaries do not usually pay inheritance tax themselves, unless the estate's value exceeds the threshold and the tax cannot be covered by the estate’s assets.
What happens if you miss the Inheritance Tax deadline?
If the tax is not paid within 6 months:
- Interest will be added daily to the unpaid amount.
- HMRC may take enforcement action if the payment is significantly delayed.
- The probate or letters of administration may also be delayed until some or all of the tax is paid.
You don’t have to wait until the 6-month deadline. If you have access to funds, you can make an early payment. HMRC allows this, and it can reduce or eliminate interest charges.
For property and other non-liquid assets, you may choose to:
- Pay in 10 annual instalments (for certain assets like houses).
- Pay the first instalment by the 6-month deadline, then the rest over time.
Other taxes you might face when inheriting a house
In addition to the inheritance tax, you may also be subject to other taxes when inheriting a home from your parents. The additional taxes may include:
- Income tax: If you decide to rent the property rather than sell it, you’ll have to pay income tax on the rental income you receive.
- Capital Gains Tax (CGT): If you choose to sell the property, you’ll have to pay CGT. The current rate of CGT is 18% for basic rate tax payers and 24% for higher rate taxpayers.
Do you pay Stamp Duty on an inherited house?
No. You won’t have to pay Stamp Duty when inheriting your parents’ house. This duty is only paid when buying a home.
However, if you buy the property from other joint owners, you may have to pay the Stamp Duty. It’s best to seek out the advice of a financial advisor in these cases.
Can you legally avoid Inheritance Tax on your parents’ property?
You cannot avoid paying Inheritance Tax on property that you have inherited from your parents. However, you can start tax planning whilst your parents are still alive. There are legal ways to reduce a future Inheritance Tax bill, but they must be structured carefully, and they won’t guarantee that you can avoid tax entirely.
One option that you and your parents could consider is for them to gift you their property whilst they’re alive. If they survive for seven years after making the gift, you might not have to pay Inheritance Tax on it. However, if they continue to live in the property without paying a full market rent, it could still be treated as part of their estate under what’s known as a “gift with reservation of benefit”.
Your parents could also sell the property to you. However, if they sell it to you under market rate, it can create complications. The discount could be seen as a gift, and so there could be Capital Gains Tax implications. In addition, transferring property in this way can affect your parents’ entitlement to any means-tested benefits or local authority care funding, as it can be seen as a deliberate deprivation of assets.
The rules are complex and each family is different, so it can be best to get professional legal and financial advice before you make any decisions around transferring property. What seems like a simple way to reduce tax could result in unexpected costs or legal issues later on.
What to do if you want to sell the inherited house?
There’s a lot to consider when inheriting a home from your parents. If you don’t want to live in the home yourself, there are options available, such as renting the home or selling it.
However, before making any major decision, we highly recommend contacting a financial advisor who can help you find the best options for dealing with your inheritance.
Looking to sell your inherited property? Contact Bettermove today. We can help you sell your house for free. Find out more with our step by step guide to selling your house. We can sell your house online for free when it suits you.
