Inheritance Tax on Jointly Owned Property

Inheritance tax on jointly owned property depends first on how the home is held. Property owned as joint tenants passes automatically to the surviving owner by survivorship, while a share held as tenants in common passes under the will or the intestacy rules and is valued as part of the estate.

Either way, tax arises only where the whole estate, including the deceased's interest in the property, is worth more than the available tax-free bands, with the standard rate of 40% falling on the excess (gov.uk, as at July 2026, subject to change). This guide explains the two forms of joint ownership, how each is treated, how a share is valued, and where the spouse exemption changes the answer. It forms part of our wider Inheritance Tax Explained guide, and sits alongside our note on inheritance tax on property. Figures are current as at July 2026 and are subject to change.

Do you pay inheritance tax on jointly owned property?

Not automatically. A jointly owned home is only caught where the whole estate, counting the deceased's share of the property, exceeds the nil-rate band of £325,000 per person, with 40% charged on value above the combined bands (gov.uk, as at July 2026, subject to change). Many estates fall within the bands and pay nothing. What joint ownership changes is how the share passes and how it is valued, not whether the ordinary thresholds apply.

Joint tenants and tenants in common

There are two ways to co-own property in England and Wales, and they behave differently on death. As joint tenants, you both own the whole and, when one dies, that person's interest passes automatically to the survivor. As tenants in common, each owns a distinct share, which passes under the will or intestacy rather than automatically (gov.uk, joint property ownership, as at July 2026).

Source: gov.uk, joint property ownership and gov.uk, joint property you inherit, as at July 2026, subject to change. In Scotland these are called joint owners and common owners; in Northern Ireland, coparceners.

How is a share of jointly owned property valued?

The value of the deceased's interest depends on the type of ownership and on who the co-owner is. Where an asset was owned as joint tenants with a spouse or civil partner, HMRC's guidance is to divide the value of the asset by 2 to reach the deceased's share (gov.uk, estimate the estate's value, as at July 2026, subject to change). Where the property was held with someone other than a spouse or civil partner, the guidance is to divide the value by the number of owners and then take 10% off the deceased's share.

For tenants in common, you value the estate on the deceased's actual share, whether that is a half or an agreed percentage, without an automatic reduction (gov.uk, joint property you inherit, as at July 2026, subject to change). Valuation of shared property can be involved, and the figures below are the starting point rather than the last word, so many people ask a professional valuer or adviser to confirm the position.

Source: gov.uk, estimate the estate's value and gov.uk, joint property you inherit, as at July 2026, subject to change. In Scotland, for joint ownership with someone other than a spouse or civil partner, the guidance is to take £4,000 off the value of the whole asset before working out the person's share (gov.uk, as at July 2026, subject to change).

When the co-owner is a spouse or civil partner

A share passing to a husband, wife or civil partner is generally exempt from inheritance tax, however the home is held. With joint tenants, survivorship carries the share to the surviving spouse tax free; with tenants in common, a share left to a spouse by will is usually exempt too, and unused nil-rate band and residence nil-rate band can transfer to the survivor (gov.uk, as at July 2026, subject to change). For unmarried co-owners the exemption does not apply, which is covered in our note on IHT for unmarried couples.

The example shows why the form of ownership and the identity of the beneficiary matter as much as the value of the house. It also shows the limits of the residence nil-rate band, which generally applies only where a home passes to children or grandchildren (gov.uk, passing on a home, as at July 2026, subject to change). Where a jointly owned home sits near the thresholds, it can be worth discussing the position with a qualified professional before doing anything.

Jointly owned property in Scotland and Northern Ireland

Inheritance tax is a UK-wide tax, so the £325,000 nil-rate band and the 40% rate apply across all four nations (gov.uk, as at July 2026, subject to change). The surrounding property law differs. In Scotland co-owners are called joint owners and common owners, and for joint ownership with someone other than a spouse or civil partner the guidance is to take £4,000 off the whole asset before working out the share (gov.uk, as at July 2026, subject to change). Northern Ireland uses the term coparceners for common ownership. Scotland also has its own succession rules, including legal rights. Where a property touches more than one UK nation, it can be worth taking advice in each. For the wider picture, see our estate planning guide.

Frequently asked questions