Inheriting a House With Siblings: Sell, Buy Out or Keep It

Until the executors transfer it, the house belongs to the estate, not to the siblings, and the executors decide whether to sell it or pass it on. Many executors are siblings themselves, so in practice the decision is usually a family one. The table sets out the choices.

Two values matter. The estate needs the value on the date of death for probate and any Inheritance Tax, and that figure also becomes the siblings' starting point for Capital Gains Tax. A buyout needs a current value, because the house may have gone up or down since the death. Where executors transfer the house to one beneficiary as part of their share, the law lets them fix the value and requires them to use a qualified valuer where one is needed (Administration of Estates Act 1925, section 41), and the beneficiary has to consent.

Siblings can agree any basis for valuing a share between themselves. A straight fraction of the whole value is the simplest. HMRC discounts a share in a jointly owned house for Inheritance Tax, usually by 10 to 15%, because a share is hard to sell to an outsider, but that reasoning does not apply when a co-owner is the buyer.

Agreeing a low price as a favour does not save the selling siblings tax. Brothers and sisters are connected persons for Capital Gains Tax, so a sale between them is taxed as if it happened at market value, whatever was actually paid. An independent RICS valuation gives everyone the same figure and gives HMRC one it can check.

Inheriting a house, or a share of one, is free of Stamp Duty Land Tax, even when a mortgage comes with it. Tax starts when a sibling pays for more than their share. They pay Stamp Duty on the money they pay the others, plus the part of any outstanding mortgage that goes with the shares they take on. That applies whether the executors transfer the whole house to them in return for a payment to the others, or the siblings sell their shares to them after the transfer. Nothing is due, and no return is needed, if the total is under £40,000.

In England and Northern Ireland the standard rates since 1 April 2025 are 0% up to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above that. A sibling who already owns another home pays 5% on top of each band. There are exceptions for a sibling who is replacing their main home, and for one who already owns 25% or more and has lived in the house as their only or main home for the previous 3 years. First-time buyer relief is not available, because inheriting a share counts as having owned a home.

For example, two sisters inherit a £300,000 house equally and one pays the other £150,000 for her half. If the buyer owns no other home, the tax is £500 (2% of the £25,000 above £125,000). If she already owns a home, it is £8,000 (5% of £125,000 plus 7% of £25,000). In Wales the tax is Land Transaction Tax, and in Scotland Land and Buildings Transaction Tax, with their own rates.

Whoever sells, the starting value for Capital Gains Tax is the market value on the date of death. Where Inheritance Tax was paid and HMRC agreed the value, that figure is used. Only the rise since the death is taxed, after selling costs. A sibling's share is valued as a straight fraction of the whole for this purpose, with no discount for joint ownership.

The executors transfer the house with an assent on HM Land Registry form AS1, which records whether the siblings hold it as joint tenants or tenants in common. As joint tenants, a sibling's share passes automatically to the others when they die. As tenants in common, each owns a defined share that they can leave by will, which suits siblings who want their share to go to their own children. For tenants in common, the Land Registry enters a restriction so that a sale needs at least two owners to sign. Registering the assent costs £20 to £140 through the Land Registry portal, depending on the value.

No more than four people can be registered as legal owners. With five or more siblings, the first four named hold the house on trust for all of them, and the others keep their shares.

A sibling who lives in the house will usually be entitled to occupy it, pays the council tax as the resident, and cannot be made to leave without their consent or a court's approval. The 1996 Act ties compensation for the others to their own right to occupy being excluded or restricted, so agree in writing who pays what before anyone moves in. A mortgage stays attached to the house, so it comes out of the house's value rather than the rest of the estate, unless the will says otherwise. If nobody lives there, see how council tax works on an empty inherited house.

When co-owners disagree, any of them can apply to the court under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The court looks at what the parent intended, why the house is held, the welfare of any child living there, the interests of any lender to a sibling, and the wishes of the majority by value of their shares. It has the power to order a sale.

The court cannot order one sibling to sell their share to another. What it can do is order a sale that gives one sibling the first chance to buy at a price the court fixes from valuation evidence, with an open-market sale if they do not. Court proceedings are slow and expensive, so an agreed independent valuation and mediation are usually the cheaper route.

In Scotland the house vests in the executor on confirmation and is transferred to the siblings by a docket on the confirmation or a disposition. They then own it in common, and any of them can ask the sheriff court for an action of division and sale, which can end in a sale overseen by the sheriff clerk. A will can qualify that right, for example by giving one sibling the right to live in the house.