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You've inherited a property. Now what?

Important information - please keep in mind that the value of investments can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future.

Inheriting a property

Many people inherit property when a loved one dies. And while it may be the last thing you want to deal with in that moment, understanding what happens next could help you in the long run. If you've sold a property and are wondering what to do with the proceeds, you might like to talk to one of our financial advisers to see if a personal recommendation is right for you. 

Learn more about advice

Here's what we'll cover

What happens before you inherit a property?

The executor will have had to go through a number of complex stages before the bequeathed property actually becomes yours. The executor will have to:

Locate the will
Go through probate
Transfer ownership

Understand what you're dealing with

It's important you understand the legal ownership status of the property you're inheriting (or part inheriting).

Joint tenancy
If the property is held under a joint tenancy, then the surviving owner automatically inherits it.

Sole ownership
If the property was owned outright by the deceased, their will should outline who inherits it.

Tenants in common
If the property is held as tenants in common, the will should outline who inherits the deceased person's share.

What happens if I inherit a share of the property?
What happens if someone is living in the property?

To put it simply, joint tenants have equal rights to the whole  property. 

Tenants in common can own different shares of the property. 

Love, sell or let your property?

On the one hand, inheriting a property is an incredibly generous gift. On the other, it carries a lot of responsibility. You - along with any other potential beneficiaries - have a choice to keep the property for yourself, sell it or rent it out. It’s a big decision and important to weigh up the pros and cons.

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Love it

If this is your preferred option, and it's been left to multiple loved ones, agreements must be drawn between beneficiaries.

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Sell it

If it’s jointly inherited, you’ll need to agree on selling the property. You'll probably want to consider things like when the right time to sell is and what price you're prepared to sell at.

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Let it

Renting can bring in a steady income for inheritors of a property. But you will have to pay tax on any profit that you make from renting.

Property and tax

You won't need to pay Income Tax or Capital Gains Tax immediately if you inherit a property for the majority of the UK, although the rules differ for Scotland.

Selling an inherited property - if the inherited property isn't declared with HM Revenue & Customs (HMRC) as your main home, you'll have to pay Capital Gains Tax on any profit you make when you sell it. If you own two properties, you have to tell HMRC which is the main residence within two years of owning them.

Renting out an inherited property - you may have to pay Income Tax on the rental income.

Properties held in trust - if the property is held in a trust, you are the beneficiary and the trustees are the legal owners and responsible for paying tax on income the trust receives. As beneficiaries of the trust you may be able to enjoy rights to the property - in other words live in it or receive some of the rent paid on it. You may still have to pay tax on any income you receive from the trust.

The exception to this rule is if the property is held in a bare trust (these trusts are for children under the age of 18 - or 16 in Scotland). In which case, the trust would be the legal owner but as the beneficiary, the child would be responsible for paying tax on any income the trust receives. 

Learn more about Inheritance Tax

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You've sold your property. What are your options?

Deciding what to do with a large lump sum of money isn't easy. If you want more of a personal recommendation, our financial advisers can help. Equally, you can invest with help from our online guidance and tools. The choice is yours. 

I'm thinking about taking financial advice

If you're looking for a personal recommendation that considers tax efficiency, and which will give you peace of mind, our financial advisers can do all the hard work for you.

Learn more about financial advice

I want to open or transfer an account

If you already know which account you'd like to open - or transfer into - you can open and transfer from here.

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I want to know which account is best for me

If you're not sure which account is right for you, this simple quiz will help you decide.

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I want to choose investments

After you've opened an account, we have thousands of investments to choose from. We can provide tools and guidance to help you choose your investments.

Find investments

Important information: please note that this information and our guidance tools are not a personal recommendation in respect of a particular investment. If you need additional help, please speak to an authorised financial adviser.  You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals.
 

What next?

What to do with an inheritance

Learn more about your options and how to get your inheritance working harder for you.

Learn ways to invest your inheritance

All inheritance topics

To learn about the different types of inheritance and the topics surrounding them, head to our inheritance home.

Go to inheritance home

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Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.

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