For many people, inheriting a home from a loved one is bittersweet. On one hand, it represents a legacy. On the other, it can trigger a maze of paperwork, tax obligations, and tough decisions. One area that often trips people up? Stamp duty on probate property.
It’s a subject that’s murkier than it should be. Even seasoned property professionals sometimes get it wrong. So if you’re an executor, a beneficiary, or simply someone preparing for the future, here’s what you need to know in 2025.
First, the good news: no stamp duty to inherit
Let’s start with a common myth. If you’re inheriting property through a will, you don’t pay Stamp Duty Land Tax (SDLT) just because ownership has passed to you. Probate property isn’t “bought” in the usual sense—it’s transferred as part of an estate, so HMRC doesn’t view it as a taxable purchase. That means no stamp duty bill just for becoming the new legal owner.
This applies regardless of how much the property is worth, or whether it’s residential or commercial. It’s one of the few moments in the probate process that won’t cost you anything directly.
But things change when the property is sold
Where it gets more complicated is if the executor or beneficiary sells the inherited property. That’s where SDLT can sneak back into the picture—especially if a beneficiary decides to buy it from the estate.
Say, for example, you’re one of three siblings inheriting a flat in London. If one of you wants to keep it and buy out the others, that purchase is liable for stamp duty. It doesn’t matter that you were already named in the will. The moment money changes hands and ownership is rebalanced, it’s treated like a market transaction.
In that case, SDLT is calculated based on the share being acquired and the total consideration paid. If the property is worth £600,000 and you’re buying out two-thirds, you’ll owe stamp duty on £400,000. And with property prices rising again in many parts of the UK, those tax bills are starting to bite.
Executors should tread carefully
If you’re acting as an executor, your main duty is to administer the estate fairly and legally. That means handling any property with care. Selling a home from an estate isn’t as simple as putting it on the market. You’ll need to apply for a Grant of Probate first, which gives you the legal authority to deal with the deceased’s assets.
Once that’s done, you can list the property and sell it on behalf of the estate. If the buyer is a third party, stamp duty is their problem, not yours.
But if you’re selling to a beneficiary, make sure you flag the stamp duty implications clearly. It’s not your job to give tax advice, but missteps here can create family tension or even legal headaches down the line.
The extra 3% surcharge
Here’s another twist that catches people out: the 3% stamp duty surcharge for second homes still applies—even to beneficiaries.
Let’s say you inherit a house in Manchester but already own a flat in Bristol. If you decide to buy out your siblings and keep the Manchester house, you’ll probably pay the 3% surcharge on top of the usual stamp duty rates. That’s because you’re acquiring an additional property, not replacing your main residence.
In some cases, you can get that extra tax refunded if you sell your original home within three years. But the rules are picky, and the paperwork isn’t fun. If in doubt, speak to a conveyancer or tax adviser before making any decisions.
Planning ahead can help
As always with tax, a little planning goes a long way. Families often assume that passing on a home through a will is the most straightforward route. And in emotional terms, it often is. But if your goal is to keep a property within the family, or to pass it on without incurring major tax bills, there may be smarter ways to do it.
For example, putting a property into a trust while you’re alive, or gifting shares over time, might reduce exposure to stamp duty or inheritance tax—though each strategy comes with its own risks and costs.
These aren’t decisions to take lightly, but they’re worth exploring with proper legal and financial advice. Because while death and taxes are both certain, how you handle them is up to you.
In summary
Here’s what to remember about stamp duty on probate property in 2025:
- You do not pay stamp duty when you inherit a property through probate.
- If you buy the property (or a share of it) from the estate or from other beneficiaries, stamp duty does apply.
- The 3% second home surcharge can also apply if you already own property.
- Executors should be transparent about potential tax implications when selling to beneficiaries.
- Planning ahead can help reduce headaches later—but requires good advice.
Probate is already an emotional and administrative burden. Understanding the tax side of it—especially when it comes to stamp duty—can save time, money, and stress at a moment when families need less of all three.
