Exemption from Stamp Duty Land Tax for Transactions Following Death Explained

SDLT exemption for changes to inherited property within two years of death

Some changes to who inherits land or property after a person’s death are exempt from Stamp Duty Land Tax. The exemption can apply where a will, intestacy outcome, or other disposition made by the deceased is varied within two years of death, as long as no prohibited payment or other money’s worth is given in return.

• The rule covers post-death variations that change who receives property from the deceased.
• The variation must be made within two years after the date of death.
• The exemption is lost if consideration in money or money’s worth is given, unless it is only another qualifying variation.
• Assuming secured debt is not treated as consideration for this specific exemption.
• The exemption can apply whether the original entitlement arose under a will, intestacy, or another disposition, and it can still apply before the estate has been fully administered.
• A deed of variation or family arrangement is not automatically exempt; the key checks are timing, the nature of the variation, and whether any payment or value has been given.

Scroll down for the full analysis.

SDLT exemption for post-death variations made within two years

Some land transactions that happen after a person dies are exempt from Stamp Duty Land Tax. This page explains the exemption for transactions that change who inherits property from the deceased, where the change is made within two years of death and no prohibited consideration is given. The point matters because a change to the destination of land can otherwise look like a land transfer that might trigger SDLT.

What this rule is about

When someone dies, land may pass under a will, under the intestacy rules, or under another disposition made by the deceased. Sometimes the people involved later decide to alter that outcome. For example, they may redirect property from one beneficiary to another.

The SDLT question is whether that later transaction is itself chargeable. The rule covered by the official source creates an exemption for certain post-death variations. Its purpose is to prevent SDLT arising simply because the devolution of the deceased’s property is rearranged shortly after death, provided the statutory conditions are met.

What the official source says

The official material says that a transaction is exempt if it varies a disposition of property that the deceased was competent to dispose of, and all of the following conditions are satisfied:

• the variation is made within two years after the person’s death, and
• no consideration in money or money’s worth is given for the transaction, apart from the making of another variation of the same kind.

The source also makes two important points.

• The exemption can apply whether the original disposition arose under a will, under intestacy, or otherwise.
• The exemption can apply even if the estate administration is not yet complete and even if the property has not yet been distributed in line with the original entitlement.

The source adds a specific note on consideration: for this purpose, “consideration” does not include secured debt that is assumed.

What this means in practice

In practical terms, the exemption is aimed at a rearrangement of inheritance rights, not a purchase. If beneficiaries or others entitled under the deceased’s estate alter who is to receive the property, that change can be outside SDLT if it is done in time and without relevant payment or other money’s worth changing hands.

The two-year limit is central. If the transaction happens more than two years after death, this exemption is not available on the wording described in the source.

The consideration condition is equally important. If one person effectively buys another out, that may prevent the exemption from applying. By contrast, the source makes clear that assuming secured debt is not treated as consideration for this specific exemption.

The rule is not restricted to cases where the legal title has already been transferred out of the estate. The exemption can still apply during administration, which is often when these rearrangements are actually agreed.

How to analyse it

A sensible way to approach the issue is to ask these questions in order:

• Is there a transaction that changes the destination of property passing on death?
• Does it vary a disposition made by the deceased, whether by will, intestacy, or otherwise?
• Was the property something the deceased was competent to dispose of?
• Was the variation carried out within two years after the death?
• Is any consideration being given in money or money’s worth?
• If something is being given, is it only another qualifying variation, rather than cash or other value?
• Is any secured debt being assumed, and if so, has that been treated correctly in light of the source’s statement that assumed secured debt is not consideration for this purpose?

If the answers line up with the statutory conditions as described in the source, the transaction is exempt from SDLT.

Example

Illustration: A dies leaving a house to Child 1 under a will. Within two years of A’s death, the family agrees that the house should instead pass to Child 2. No cash is paid by Child 2 to Child 1. The estate is still being administered and the house has not yet been transferred to Child 1. On the basis of the official source, this variation can fall within the exemption.

Illustration: The same facts, except Child 2 pays Child 1 a sum of money in return for giving up the inheritance. On the source wording, that payment is likely to be relevant consideration in money or money’s worth, so the exemption may not apply.

Why this can be difficult in practice

The main difficulty is usually identifying whether there is truly a variation of the deceased’s dispositions, or whether the parties have gone further and entered into a separate bargain for value. The source gives the broad rule, but real cases can involve mixed arrangements, partial redirections, balancing payments, or debt assumptions.

Another point that can cause confusion is timing. The source refers to the transaction being carried out within two years after death. In practice, parties should be clear about when the relevant variation is actually made.

The phrase “property of which the deceased was competent to dispose” can also matter. The source does not expand on that phrase here, so its application may depend on the legal nature of the deceased’s interest in the property.

Finally, readers should not assume that every deed of variation or family arrangement is automatically exempt. The exemption depends on the statutory conditions being met, especially the two-year limit and the absence of prohibited consideration.

Key takeaways

• A post-death variation of inherited property can be exempt from SDLT if it is made within two years of death.
• The exemption is only available if no consideration in money or money’s worth is given, apart from another qualifying variation.
• The exemption can still apply even if the estate administration is unfinished and the property has not yet been distributed.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Exemption from Stamp Duty Land Tax for Transactions Following Death Explained

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