Inherited property split between siblings

Inheritance can be a complex and emotional process, particularly when it involves splitting property among siblings. This guide provides a detailed overview of the legal, financial, and interpersonal aspects involved in inheriting and dividing property in the UK, ensuring a smooth and fair process for all parties involved.

Legal Framework for Inherited Property in the UK

Wills and Probate


  • Definition: A will is a legal document that specifies how a person’s estate should be distributed upon their death.
  • Importance: Having a will simplifies the process of property division. If a will clearly states how the property should be divided, the executor follows these instructions.


  • Definition: Probate is the legal process of administering the deceased’s estate, validating the will, and distributing assets.
  • Executor’s Role: The executor, named in the will, is responsible for managing the estate, including property distribution.

Intestacy Rules:

  • Without a Will: If the deceased did not leave a will, the property is distributed according to intestacy rules, which typically favor spouses and children.
  • Siblings’ Share: If there is no surviving spouse or children, the estate may be divided among siblings.

Steps in the Probate Process

  1. Valuation of the Estate:
    • Property Valuation: Professional valuation of the property is essential for determining its worth for tax and distribution purposes.
    • Estate Inventory: Includes all assets, debts, and the property to be divided.
  2. Application for Probate:
    • Grant of Probate: The executor applies for a Grant of Probate to gain legal authority to manage the estate.
    • Letters of Administration: If there is no will, the next of kin applies for Letters of Administration.
  3. Paying Debts and Taxes:
    • Inheritance Tax: Inheritance tax must be paid if the estate exceeds a certain threshold (£325,000 as of 2023).
    • Other Debts: Outstanding debts, including mortgages, must be settled.
  4. Distribution of the Estate:
    • Following the Will: The executor distributes the estate according to the will.
    • Intestacy Rules: If no will exists, the estate is divided per intestacy laws.

Methods of Splitting Inherited Property

Selling the Property

Selling and Splitting Proceeds:

  • Agreement Among Siblings: All siblings must agree to sell the property.
  • Estate Agent: Hiring a professional estate agent can facilitate the sale.
  • Division of Proceeds: After selling the property, the proceeds are divided among the siblings according to the will or intestacy rules.


  • Simplicity: Selling the property converts it into liquid assets, simplifying division.
  • Avoids Disputes: Easier to split money than a physical asset.


  • Emotional Attachment: Siblings may have sentimental attachment to the family home.
  • Market Conditions: The property market’s condition can affect the sale price and timing.

One Sibling Buying Out Others

Buyout Arrangements:

  • Valuation: Obtain a fair market value for the property.
  • Financing: The buying sibling must arrange financing to purchase the shares of the others.


  1. Agreement: All parties agree on the terms of the buyout.
  2. Legal Documentation: A solicitor drafts the necessary documents to transfer ownership.
  3. Payment: The buying sibling pays the agreed amount to the others.


  • Retaining Property: Allows the property to remain within the family.
  • Simplicity: Fewer legal complications compared to selling.


  • Financial Burden: The buying sibling must have sufficient funds or access to financing.
  • Valuation Disputes: Agreeing on a fair price can be challenging.


Joint Ownership:

  • Deed of Trust: A legal document outlining the terms of co-ownership.
  • Sharing Responsibilities: Siblings share the maintenance, expenses, and benefits of the property.


  • Retains Family Home: Keeps the property within the family.
  • Future Investment: Potential for property value appreciation.


  • Ongoing Responsibilities: Continuous management and expense sharing.
  • Potential for Disputes: Disagreements over usage and expenses.

Legal Considerations

Trusts and Deeds


  • Definition: A trust can be set up to manage the property for the benefit of the siblings.
  • Trustees: Trustees are appointed to manage the property according to the trust deed.

Deed of Trust:

  • Purpose: Specifies the ownership shares and responsibilities.
  • Legal Binding: Ensures clarity and prevents future disputes.

Tax Implications

Inheritance Tax:

  • Threshold: Estates over £325,000 are subject to inheritance tax.
  • Rates: Typically 40% on the amount above the threshold, but various reliefs and exemptions may apply.

Capital Gains Tax (CGT):

  • Applicable Scenarios: If the property is sold and has increased in value since the deceased’s death, CGT may apply.
  • Primary Residence Exemption: If the property was the deceased’s main residence, some exemptions may apply.

Stamp Duty Land Tax (SDLT):

  • Buyout Transactions: If one sibling buys out others, SDLT may be payable depending on the transaction value.

Practical Steps for Siblings

Communication and Mediation

Open Dialogue:

  • Regular Meetings: Hold regular meetings to discuss the property and reach agreements.
  • Transparency: Be transparent about intentions and expectations.


  • Professional Mediators: Engage a mediator if disputes arise.
  • Benefits: Helps in resolving conflicts amicably and reaching fair agreements.

Legal and Financial Advice


  • Legal Advice: Seek legal advice to understand rights and obligations.
  • Document Drafting: Solicitors can draft necessary legal documents like deeds of trust and sale agreements.

Financial Advisors:

  • Inheritance Planning: Financial advisors can help in planning for inheritance tax and other financial implications.
  • Investment Advice: Guidance on how to best utilize or invest the proceeds from the property.

Case Studies and Examples

Case Study 1: Sibling Buyout

Scenario: Three siblings inherit a property. One wishes to keep the house while the others prefer to sell.


  • Valuation: They agree on a professional valuation of £600,000.
  • Buyout Agreement: The sibling who wants to keep the house arranges a mortgage and buys out the other two, paying each £200,000.
  • Legal Process: A solicitor drafts the buyout agreement and oversees the transfer of ownership.


  • The buying sibling retains the family home.
  • The other two siblings receive their fair share in cash.

Case Study 2: Co-Ownership

Scenario: Four siblings inherit a holiday home and decide to keep it as a joint family asset.


  • Deed of Trust: They draft a deed of trust outlining each sibling’s share (25%) and responsibilities.
  • Management Agreement: They create a management agreement detailing the usage schedule, maintenance responsibilities, and expense sharing.


  • The property remains within the family.
  • Clear agreements help prevent disputes and ensure fair usage.


Splitting inherited property between siblings in the UK requires careful consideration of legal, financial, and emotional factors. Executors play a crucial role in administering the estate, ensuring compliance with probate processes, and facilitating fair distribution. Siblings must communicate openly, seek professional advice, and explore various options—whether selling, buyouts, or co-ownership—to reach agreements that honor both the deceased’s wishes and the beneficiaries’ interests.

By understanding the complexities and taking a structured approach, families can navigate the inheritance process smoothly, preserving relationships and ensuring that the inherited property is managed and utilized in the best possible way.

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