Receiving an inheritance in the UK: what you need to know
What to do if you have been left some money, property or other assets in a will or family inheritance.
It can take up to a year for an inheritance to be fully sorted out.
The person responsible for carrying out the wishes in a will is called the executor.
Inheritances often take the form of cash, pensions or property.
A financial adviser can help ensure you put the assets received in an inheritance to good use.
If you’ve received an inheritance or have been named as a beneficiary in a will, you’ll need to think about what comes next. Questions to consider immediately might be:
How much will I inherit?
How soon will I inherit?
Will I have to pay inheritance tax?
If I'm inheriting property, should I sell it or keep it?
What if I inherit a share of a property? How can I access my share?
Inheriting a large amount can be life-changing, so it makes sense to take your time making any decisions. It’s a good idea to pause for a few weeks or months to make sure you get it right.
Taking advice can help you make the best use of your inheritance.
Both a solicitor and a financial adviser will come in useful here.
How long does it take to get inheritance money?
You won’t receive your inheritance as soon as the person dies – it can take up to a year for everything to be sorted out.
This process is called probate and will take longer if there is a large estate, a more detailed will or other complicating circumstances.
Even when things are straightforward, you should expect to wait at least six months.
The table below summarises the main stages of a probate, which can take up to a year:
| Probate stage | Details | Typical duration |
|---|---|---|
| Valuation | Gathering information about all debts and assets | 3 to 6 months |
| Tax filing | Submitting paperwork and paying any Inheritance tax due to HMRC | Within 6 months (interest is payable after 6 months) |
| Grant of probate | Making application to Probate Registry - this is needed to close bank accounts and sell or transfer assets | Typically 2 months |
| Estate administration | Gathering in or selling assets and paying debts and income tax and/or CGT | Typically 3 to 6 months (possibly longer if complex) |
| Distribution | Paying beneficiaries | 12 months after death (unless there are complications) |
If there is inheritance tax (IHT) to pay, this must be settled before probate is granted.
This means there can be a timing mismatch as IHT is often due before assets are sold.
If you need to settle a tax bill, the table below outlines the main options for executors.
| Method | Suitable for | Cost |
|---|---|---|
| Direct payment | Estates with some cash in the bank | Free |
| Instalment plan | Estates with property | Interest on unpaid tax |
| Probate loan | High-value estates with limited cash | Interest on the loan |
Who makes sure that the will is carried out?
The person responsible for carrying out the wishes in a will is the executor.
This may well be you, even if you are also named as a beneficiary.
The executor is responsible for gathering, valuing, calculating and distributing the assets of the estate and settling any debts, as well as paying any IHT bill.
If you are an executor, you will probably want to engage the help of a solicitor to handle the practical side of things.
This will save you a lot of time and will also ensure that all your duties are fulfilled correctly.
What if there's no will?
When someone close to you dies, check with their solicitor or their bank to see if there is a copy of the will available.
If no will exists, you should seek advice from your own solicitor and try to obtain authority as an administrator (if you are a blood relative).
Otherwise the assets will be distributed as per the Rules of Intestacy (you can also learn more about partial intestacy here).
What if I inherit a property?
A lot of inheritances take the form of a property, such as a family home that passes on to the children.
If you are the sole beneficiary, you can usually decide for yourself what to do with it (e.g. sell it, rent it out or live in it yourself).
The issue can become trickier if two or more people inherit a single property - all the more so if one of them happens to be living there at the time and doesn't want to move.
One option may be to try and sell your share - either to the other owner(s) or to another buyer agreed between you (such as a spouse, partner or tenant in common).
Such disputes can usually be resolved between you, but if you run into difficulties, then legal advice can help.
Here are the main options when it comes to inheriting a property:
| Option | Pros | Cons | Tax implications |
|---|---|---|---|
| Sell straight away | Provides cash to pay off debt, save or invest | Market timing may be poor | Usually no Capital Gains Tax (CGT), unless there is a significant delay between death and sale |
| Rent it out | Provides long-term income | Time-consuming responsibilities as a landlord | Income tax payable on rent and CGT if you sell up later |
| Buy out your family | You can keep the family home | Requires significant cash or borrowing | Stamp duty may apply on the portion you buy |
What if I inherit a pension?
Inheriting a pension is slightly different to inheriting other assets because it’s not part of an estate and therefore won’t be included in a will.
When you set up a pension, you sign an expression of wish form to nominate one or more beneficiaries.
The pension scheme will use this to determine who should inherit your pension when you die.
Pensions are currently exempt from IHT, so they’re not part of your estate for tax purposes.
However, in April 2027, the rules are changing, and an inherited pension will be liable for IHT if the deceased person’s estate exceeds their tax-free threshold.
How you ‘inherit’ a pension will depend on the type of pension scheme.
The table below summarises the main things you need to know for a defined contribution pension where there is a pot of money to inherit:
| Recipient | Age of deceased | Is it subject to IHT from April 2027? | Is it subject to income tax |
|---|---|---|---|
| Spouse | Under age 75 | No | No |
| Spouse | 75 or over | No | Yes (at their marginal rate) |
| Children or others | Under age 75 | Yes (40%) | No |
| Children or others | 75 or over | Yes (40%) | Yes (at their marginal rate) |
The rules for defined benefit pensions (for example, final salary or career average schemes) are very strict.
There won’t be a ‘pot of cash’ to pass on, but they will usually provide an income for a surviving spouse, cohabiting partner and potentially dependent children.
Check the scheme for details, as terms vary. Other people may not get anything.
If, however, you inherit a defined contribution pension, you can use this to buy an annuity, draw an income or take the money as a lump sum. You do not need to wait until you reach ‘pension age’ to get the money.
Annuities cannot be inherited. But, if the annuity holder took out a joint life policy, a continuing income will be paid to the other person.
Payments may also continue for a limited period (for example, five or 10 years) if they purchased a guarantee.
What should I do after receiving an inheritance?
This is the biggest question, and the nicest one to think about. If you receive a large sum of money or another large asset, such as a property, you’ll want to make the most of it and ensure the opportunity isn’t wasted.
Financial advice can be extremely useful here. Your adviser can help you consider your windfall in the context of your circumstances and plans as a whole. They can also help you to put the assets to good use.
With a property, for instance, they can help you decide whether to sell it now or keep it as an investment, and help you put the practicalities in place.
If you inherit a lump sum, they can help you decide how to make it work for you best – in savings, investments and perhaps also your pension.
Get expert financial advice
Deciding what to do with an inheritance can be difficult, especially as there may be tax to pay, which is why financial advice can help.
Unbiased can quickly match you with a qualified financial adviser who can guide you through deciding what to do with an inheritance and the tax implications.
If you found this article helpful, you might also find our articles on IHT business property relief and deed of variation informative too.
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