Who pays inheritance tax on jointly owned property?

These days, many families, couples and business partners split the cost of buying property by purchasing it together. But who pays inheritance tax on jointly owned property if one party passes away?

The tax treatment of jointly owned assets can be complicated and depends on several factors, including the value of the deceased’s estate, the relationship between the owners and the type of joint ownership.

As wills and probate experts, we’re here to give you more clarity on the subject. Here’s what you need to know.

Who pays inheritance tax on jointly owned property?


If you jointly own property with your spouse or civil partner and one of you passes away, assets left to the surviving partner won’t be subject to inheritance tax.

Furthermore, in many circumstances, the unused remainder of their inheritance tax nil rate band can be added to the surviving partner’s nil rate band when they pass away.

That means in certain circumstances that married couples and civil partners can collectively leave assets worth up to £1 million free from inheritance tax.

However, this exemption does not apply if you’re unmarried, or not in a civil partnership, and jointly own property with your partner.


There are a few other scenarios where the inheritance tax treatment of jointly owned property may vary, including transfers that qualify for business property relief or agricultural property relief.

As the rules surrounding these tax breaks can be complicated, reach out to an inheritance tax expert if you think these reliefs could apply.

How did you own the property?

If no exemptions are applicable, the inheritance tax payable on the estate will depend partly on whether you are ‘joint tenants’ or ‘tenants in common’.

Joint tenants

You will be considered ‘joint tenants’ if you own an undivided share of the assets. As joint tenants, you have no specific share in the asset, so each owner has equal rights to the entire property.

If one of the joint tenants passes away, the remaining owner or owners will automatically become the inheritors of the property. This means that they might be required to pay inheritance tax on the entire estate if its value exceeds £325,000, and the deceased person’s estate does not cover the tax.

Tenants in common

However, you will be known as ‘tenants in common’ if each party owns a defined share in the property. For example, you may own 60% of the property, while the other owner has a 40% share – but ownership can also be divided equally.

If you’re in this kind of joint ownership and one owner passes away, their share of the property will not automatically go to the other tenant(s) in common. In this case, each owner can pass on their share of the property in their will.

Working out who needs to pay inheritance tax on jointly owned property can be more complicated for tenants in common.

You may need to pay inheritance tax on the deceased’s share of the property if the deceased’s total estate exceeds the £325,000 inheritance tax threshold.

Suppose they left you their share of the property in their will. In that case, the executor of the will or administrator of the deceased’s estate will usually be responsible for paying inheritance tax out of the estate.

However, you may need to pay inheritance tax yourself if the estate does not have enough money to cover the bill or the executor does not pay.

How do I know what kind of joint ownership I have?

You can find information on the kind of joint ownership you have by checking documents such as your property lease or application forms sent to HM Land Registry when you registered ownership.

You should also be aware that you may need to notify the Land Registry if one of the owners of your property dies.

Getting inheritance tax right on jointly owned property

Navigating your inheritance tax liabilities after a joint owner dies can be complicated, but we can guide you in this difficult time.

As inheritance tax experts in Wales, we can help you meet your obligations, maximise your savings and minimise stress, no matter your ownership structure. If you need support writing your will as a joint owner, we can also help you create a tax-efficient estate plan to give you more control of your assets and reduce the tax burden on your loved ones.

Want to know more about who pays inheritance tax on jointly owned property? Get in touch with our experts today.


The information provided is of a general nature. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from an appropriate professional before you take any action or refrain from action. Whilst we endeavour to use reasonable efforts to furnish accurate, complete, reliable, error free and up-to-date information, we do not warrant that it is such. We and our associates disclaim all warranties. The information can only provide an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice.

Give us a call

If you have any will and probate services questions, don't hesitate to get in touch with our friendly and supportive wills and probate services team. We're here for you.