Short answer: if your inherited share is 50% or less AND you buy another residential property within 3 years of inheritance, the inherited share is disregarded and the 5% SDLT surcharge does NOT apply. Outside either condition, the inherited property counts and the surcharge applies to your new purchase.

The rule in full

For the purpose of the additional-property surcharge (5% on top of standard SDLT), HMRC disregards inherited residential property provided both conditions are met:

1. Your share of the inherited property is 50% or less (calculated by ownership percentage, not by value), AND
2. The new purchase happens within 3 years of the date you inherited (typically the date of grant of probate)

Fail either condition and the inherited property counts as a residential property you own — the surcharge applies to your subsequent purchase.

How much does this matter financially?

The 5% surcharge is meaningful. On a typical UK home purchase:

New home price	Surcharge if inherited share triggers it
£250,000	£12,500
£350,000	£17,500
£450,000	£22,500
£600,000	£30,000
£800,000	£40,000

A meaningful sum — so understanding whether the disregard applies to your specific situation is worth doing carefully.

Worked examples — when the disregard applies

Example 1 — Small share, quick purchase

Your grandmother's estate leaves her flat equally to you and your two siblings. Probate is granted 15 March 2025. Each of you owns a 33% share. You buy your first home on 10 August 2026 — 17 months after inheritance. Your share is under 50% and the purchase is within 3 years. Disregard applies — no surcharge.

Example 2 — Half share, purchase near deadline

You inherited a 50% share of a family holiday cottage in December 2023 (probate December 2023). You buy your first main home in October 2026 — 34 months after inheritance, inside the 3-year window. Your share is exactly 50%. Disregard applies — no surcharge.

Example 3 — Overseas inheritance

You inherited a 40% share of a family flat in India in 2024 (equivalent overseas probate around June 2024). You buy a UK home in November 2026 — 29 months later. Overseas inheritance counts equally with UK inheritance. Under 50% share, within 3 years. Disregard applies — no surcharge.

Worked examples — when the disregard does NOT apply

Example 4 — Purchase more than 3 years after inheritance

You inherited a 25% share of your father's house in 2022. You buy your first main home in October 2026 — 4 years later. The 3-year window has closed. Surcharge applies even though your share is small.

Example 5 — Inherited more than 50%

Your father left his flat 100% to you (sole beneficiary). Probate granted January 2026. You buy a new main home in August 2026 — 7 months later. Share is 100%. Surcharge applies — the 3-year window doesn't help because the share exceeds 50%.

Example 6 — Inherited both quickly and small — but bought BTL, not main residence

You inherited a 20% share of a family flat in 2024. In 2026 you buy a BTL investment property. The disregard for inherited property applies (share ≤ 50%, within 3 years) — the inherited share is disregarded. But you're buying an additional property regardless (a BTL is by definition additional to any main residence). The disregard removes the inherited property from the ownership count, but if you also own another property (e.g., your current main home), the surcharge still applies because of that.

What to do if you inherited more than 50%

Four options, in rough order of preference:

Option A — Same-day sale and purchase

Sell your share of the inherited property on the same day you complete on the new home. At the end of completion day you don't own two properties, so the surcharge doesn't apply. Requires a buyer for the inherited share (a sibling, a third party, or the estate as part of the winding-up).

Option B — Sell inherited property first, then buy

Sell your share of the inherited property before completing the new purchase. You own zero residential properties at the moment of the new purchase — surcharge doesn't apply. Cleanest route from a tax perspective; requires a workable sale timeline.

Option C — Pay the surcharge, then reclaim if replacing main residence

Where the inherited property was your main residence (e.g., you moved in after inheriting), the standard replacement-of- main-residence reclaim path applies. You pay the surcharge at completion of the new purchase, then reclaim within 36 months of the new purchase when the inherited main home sells. See the SDLT surcharge refund calculator for detail.

Option D — Deed of variation before 2-year deadline

A deed of variation executed within 2 years of the deceased's death can formally redirect the inheritance so you never became the beneficial owner. The share instead passes to another beneficiary (typically a sibling or child). This is a legal document, not a self-serve tax planning move — get specialist estate advice from a solicitor.

The 2-year window from death is strict. Once it closes, disclaimer / variation is no longer available.

The 3-year clock — from what date?

From the date you became the legal owner of the inherited share, which is usually:

• Grant of probate where there is a will and you're a named beneficiary or executor's transfer to you
• Letters of administration where the deceased died intestate (no will)
• Assent of executor where property is transferred out of the estate to you as beneficiary (particularly for property left in trust)

The date of death itself is NOT usually the trigger. For estates where probate takes 6-18 months to grant, this can extend the practical 3-year window by that period. Check your inheritance documents for the exact date of transfer of legal ownership.

Multiple inherited shares

If you inherited shares of multiple properties, the disregard is assessed property-by-property. A 25% share of one flat and a 60% share of another are analysed separately:

• The 25% share is disregarded (under 50%)
• The 60% share is NOT disregarded (above 50%) — surcharge applies to any subsequent purchase

Where you inherit any single share above 50%, the disregard breaks and the surcharge applies. Even if other inherited shares would independently qualify.

Joint purchases and inherited property

Where you're buying jointly with someone else, the inherited- property analysis is done for each purchaser separately — but the surcharge on the joint purchase is triggered if any purchaser fails the disregard test.

Practical example: you inherited a 60% share of your mother's flat 2 years ago. You're buying a home jointly with a first-time-buyer partner. Your inherited share triggers the surcharge for the whole joint purchase — your partner's first-time-buyer status doesn't rescue the transaction.

Timeline planning for inherited-property buyers

If you know you've inherited a share above 50% and plan to buy another property, timeline decisions matter:

• Deed of variation window (2 years from death) — decide early whether to disclaim/vary the inheritance
• 3-year window from inheritance — irrelevant if your share is above 50%; critical if it's 50% or less
• Sale of the inherited property before new purchase — coordinate with fellow beneficiaries and estate solicitor
• 36-month reclaim window from new purchase — only relevant if the inherited property was your main residence

Frequently asked questions

Do I pay the 5% SDLT surcharge if I inherited a property?

Not if your share is ≤ 50% AND purchase is within 3 years of inheritance. Fail either condition and the surcharge applies.

What counts as the date of inheritance?

Grant of probate or letters of administration — the date you became legal owner. Not usually the date of death.

How is the 50% share calculated?

By ownership share, not by value. One-third with two siblings = 33% (qualifies). Half share = 50% (still qualifies). Above 50% breaks the disregard.

What if I inherited more than 50%?

Options: sell inherited share before new purchase; same-day sale/purchase; pay surcharge and reclaim if replacing main residence; deed of variation within 2 years of death.

Does the 3-year clock start at death or probate?

At the date you became legal owner — typically grant of probate, not date of death. This extends the practical window for estates with slow probate.

Can I disclaim an inherited property to avoid the surcharge?

Yes — deed of variation within 2 years of death. Must be done properly with legal advice. Once the 2-year window closes, no longer available.

Does inheriting overseas property count?

Yes. The surcharge test looks at residential property ownership worldwide.

What if the inherited property is my main residence?

Standard replacement-of-main-residence rules apply. Pay surcharge at completion of new purchase; reclaim within 36 months when inherited home sells.

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Last reviewed: 21 August 2026. Guidance only — always confirm with your conveyancer and, for anything above £250k SDLT at stake, a qualified SDLT specialist.