Dying Intestate with a Rental Property Portfolio: the Statutory Order, Administration Mechanics, and Post-Death Rescue Routes

A surprisingly large fraction of UK landlords die without a valid will. Probate-practitioner estimates put the figure near half of all adult deaths; landlord-cohort estates are not materially different. The consequence is intestacy: the statutory order under Administration of Estates Act 1925 s.46 as modernised by the Inheritance and Trustees' Powers Act 2014 determines who inherits, in what shares, on what timetable, regardless of what the deceased would have written into a will if they had ever sat down to draft one. This page walks the operational reality of an intestate landlord estate in three layers: the statutory order itself, the administration mechanics that govern who manages the estate and how, and the post-death rescue routes that can reshape the outcome within two years of death.

The critical numerical anchor: the statutory legacy for a surviving spouse or civil partner is £322,000 under the Administration of Estates Act 1925 (Fixed Net Sum) Order 2023, with effect from 26 July 2023. Pre-2023 competitor content still cites the older £270,000 figure. Any analysis that does not start from the £322,000 number is operating on stale ground. This page uses the current figure throughout.

The statutory order under AEA 1925 s.46 as amended

Administration of Estates Act 1925 s.46 sets out the order in which the intestate estate passes. As amended most recently by the Inheritance and Trustees' Powers Act 2014, the order is:

1. Surviving spouse or civil partner takes everything where there are no issue. Where the deceased dies leaving a surviving spouse or civil partner and no children, grandchildren, or remoter descendants, the spouse takes the whole estate absolutely. The 2014 Act simplified this: under the pre-2014 rules a residue above £450,000 still split between spouse and parents or siblings; the 2014 Act removed that residual claim entirely.
2. Surviving spouse plus issue: a three-part split. Where the deceased dies leaving a surviving spouse / civil partner and issue (children or remoter descendants), the spouse takes (a) all personal chattels absolutely; (b) the statutory legacy of £322,000 absolutely (charged on the residue, with statutory interest from the date of death under AEA 1925 s.46(1A)); (c) one-half of the remaining residue absolutely. The other half of the remaining residue passes to the issue on the statutory trusts under AEA 1925 s.47.
3. No surviving spouse: issue take everything per stirpes. Where the deceased has no surviving spouse but leaves issue, the estate passes to the issue on the s.47 statutory trusts: equal shares between living children of the deceased, with the share of any predeceased child passing to that child's own issue per stirpes (i.e. the grandchildren of the deceased divide their parent's share between them).
4. No spouse, no issue: parents. Where the deceased leaves no spouse and no issue, the estate passes to the deceased's surviving parents in equal shares.
5. No spouse, no issue, no parents: siblings of the whole blood and their issue. Then half-blood siblings, then grandparents, then aunts and uncles, ultimately the Crown.

The list is exhaustive. Unmarried cohabitants do not appear. Step-children (other than those formally adopted by the deceased) do not appear. Friends, carers, business partners, and any other person to whom the deceased might have wanted to leave something do not appear. The statutory order is the answer regardless of contribution, length of relationship, expressed wishes that did not make it into a will, or family expectation.

The £322,000 statutory legacy in detail

The statutory legacy is the fixed-cash amount the surviving spouse or civil partner is entitled to absolutely off the top of the residuary estate before the half-residue split engages. The figure has been moving up over time:

• £250,000 under the Administration of Estates Act 1925 (Fixed Net Sum) Order 2014, effective 1 October 2014 (introduced alongside the 2014 Act reforms).
• £270,000 under the AEA 1925 (Fixed Net Sum) Order 2020, effective 6 February 2020.
• £322,000 under the AEA 1925 (Fixed Net Sum) Order 2023, effective 26 July 2023.

The Lord Chancellor reviews the figure approximately every five years; an uplift is triggered where the consumer prices index has risen more than 15% above the level at the previous Order. The next review point falls around 2028 unless a CPI rise triggers an earlier statutory-instrument uplift.

The legacy is charged on the residue and carries statutory interest from the date of death until the date of payment. The current statutory rate of interest is the official rate set under AEA 1925 s.46(1A) plus subsequent statutory instruments. The interest is a charge against the residue, reducing the amount available for the half-residue split between spouse and issue. Where the residue is insufficient to pay the legacy in full (a rare scenario for a property-portfolio estate), the spouse's claim has priority over the issue's share.

What "personal chattels" means in s.46 is defined in s.55(1)(x) of the AEA 1925 as amended: tangible movable property owned by the deceased other than (a) money or securities for money, (b) property used by the deceased solely or mainly for business purposes, (c) property held by the deceased solely as an investment. For a landlord-deceased, this distinction matters: the personal car, jewellery, furniture, and household effects are personal chattels passing to the spouse outside the statutory legacy; the buy-to-let properties and any rental-business-use vehicles are not chattels and form part of the residue.

The half-residue split where there are issue

After the statutory legacy and personal chattels have passed to the spouse, the remaining residue is split: one half to the spouse absolutely; one half to the issue on the s.47 statutory trusts. The 2014 Act reform converted the spouse's half-share from a life interest (the pre-2014 position) to an absolute share, which avoided the previous requirement to administer the spouse's share through a continuing trust.

Worked example. Mr Roberts dies intestate leaving a surviving spouse Mrs Roberts and three adult children. His net estate after IHT is £1,500,000 (a small mortgage on his main residence has been settled; the residue is comprised of a £600,000 family home held in his sole name, a £900,000 BTL portfolio of three flats held in his sole name, £40,000 of personal chattels, and modest other assets). The intestacy distribution:

• Personal chattels (£40,000) to Mrs Roberts absolutely.
• Statutory legacy of £322,000 to Mrs Roberts absolutely, charged on the residue.
• Remaining residue (£1,500,000 minus £40,000 minus £322,000) = £1,138,000.
• Half of remaining residue (£569,000) to Mrs Roberts absolutely.
• Half of remaining residue (£569,000) to the three children equally, on the s.47 statutory trusts. Each child takes £189,667 absolutely.

Mrs Roberts' total entitlement: £40,000 + £322,000 + £569,000 = £931,000 absolutely. The three children's total entitlement: £569,000 between them, or £189,667 each. The full £1,500,000 is allocated between spouse and issue with no part going to Mr Roberts' parents, siblings, or any other relative.

Statutory trusts for minor children under s.47

Where the deceased left children who are minors, the children's share of the residue passes to them on the statutory trusts under AEA 1925 s.47. Mechanically:

• The personal representatives (or the children's appointed trustees) hold the children's share on contingent trust. The contingency is the child attaining majority (18 in England, Wales, and Northern Ireland; 16 in Scotland under the Age of Legal Capacity (Scotland) Act 1991) or earlier marriage or civil partnership.
• During minority, the trustees have power to apply income and capital under the Trustee Act 1925 ss.31-32 as amended by the Inheritance and Trustees' Powers Act 2014. The 2014 Act removed the previous one-half cap on income maintenance and the previous one-half cap on capital advancement, modernising the trustees' flexibility.
• On the child's 18th birthday the share vests absolutely. The trustees transfer the property to the child outright. From that date the child is the legal and beneficial owner.

The s.47 statutory trusts are structurally a bare-trust-like contingent arrangement, not a discretionary trust. The child is the absolute equitable owner from the moment of intestacy, subject only to the contingency of reaching majority. The trustees do not have discretion over who benefits or in what shares; the s.46 statutory allocation is what determines the share.

A critical income-tax point: ITTOIA 2005 s.629 (which attributes minor-child trust income back to the settlor during the settlor's life, see our separate page on the parental gift to a minor child for the depth treatment) does not apply to the statutory trusts under s.47. The reason: the deceased is the settlor of the statutory trust (the trust arose by operation of law on their death); the deceased is no longer alive; the s.629(1) condition that the income arises "during the life of the settlor" is not met. The income from the minor's share is therefore the minor's own income for income-tax purposes, taxable at the minor's marginal rate with the minor's personal allowance (£12,570 for 2026/27) and savings allowance available. This is one of the structural advantages of inheriting via intestacy versus receiving a lifetime gift: the s.629 trap does not bite.

The unmarried-cohabitant catastrophe

The statutory order under s.46 makes no provision for unmarried cohabitants regardless of relationship length, contribution, or family circumstance. Where a person dies intestate leaving an unmarried partner with whom they have been cohabiting for years (often decades), having raised children together (the deceased's biological children, who do appear in the s.46 order), having jointly contributed to the mortgage on the family home, the unmarried partner inherits nothing automatically. The deceased's biological children take everything (under s.46(1)(i) where there is no spouse). The partner's situation can include being asked to vacate the family home by the children, who are now its legal owners under the statutory trusts.

The cohabitant's only legal remedy is a discretionary claim under the Inheritance (Provision for Family and Dependants) Act 1975 s.1(1)(ba), which allows a court to order "reasonable financial provision" out of the estate where the claimant is a person who "was living in the same household as the deceased, and as the husband or wife of the deceased" for the whole of the two years ending immediately before death. Three structural problems with the 1975 Act route:

• The claim is discretionary, not entitlement-based. The court has wide latitude on what "reasonable financial provision" means in the cohabitant's specific circumstances. There is no fixed-percentage entitlement; the outcome can range from modest income provision (maintenance-type orders) to substantial capital awards (transfer of the family home outright), depending on the court's assessment of the cohabitant's needs and the deceased's resources.
• The claim must be issued within six months of the grant of representation. The deadline is rigid; late claims require leave of the court, which is rarely granted absent compelling circumstances. Cohabitants who do not realise their position until the estate has been distributed can find themselves time-barred.
• The litigation is expensive and slow. A 1975 Act claim typically runs to a six-figure costs bill on both sides combined (the cohabitant's costs plus the estate's costs defending) and 18-30 months from issue to judgment. The cohabitant often has to fund the claim from their own resources or from contingent-fee arrangements; the cost-benefit calculation is rarely straightforward.

The practical answer for unmarried cohabitants in landlord estates is to address the position before death: a will is the only reliable mechanism, with the cohabitant named as beneficiary in the proportions the deceased intends. Where the deceased did not leave a will, the survivor's only route is the 1975 Act claim, which the surviving partner should be prepared to issue within the six-month window.

Administrator appointment priority under NCPR 1987 r.22

Where there is no will, the personal representatives are administrators rather than executors. Non-Contentious Probate Rules 1987 r.22 sets the priority order for who can apply for the Grant of Letters of Administration:

1. Surviving spouse or civil partner.
2. Children of the deceased and the issue of any predeceased child.
3. Parents of the deceased.
4. Siblings of the whole blood (or their issue per stirpes if any have predeceased).
5. Siblings of the half blood (or their issue per stirpes).
6. Grandparents.
7. Aunts and uncles of the whole blood (or their issue).
8. Aunts and uncles of the half blood (or their issue).
9. If none of the above, the Public Trustee or the Crown's Treasury Solicitor.

Where a person in higher priority is unable or unwilling to act, the next in priority may apply on production of a renunciation by the higher-priority person. Where multiple people share the same priority (e.g. three adult children of a deceased parent with no surviving spouse), any one or more may apply, with the others either joining or renouncing. The Probate Registry will not issue letters to a single applicant where higher-priority persons have not renounced; the application is held pending until the renunciations are filed or the higher-priority persons join.

The administrator priority is independent of the inheritance order; the administrator manages the estate but does not necessarily inherit it. A surviving spouse who renounces administration (e.g. because they prefer not to deal with the property portfolio) does not give up their intestacy entitlement; they receive their statutory share regardless of who administers.

The grant of letters of administration and the administration period

The application process for letters of administration is similar to the application for a grant of probate. The administrator files:

• IHT400 (full inheritance tax account) or IHT205 (the simplified account, for estates below the IHT threshold and meeting other simplification criteria) with HMRC. The IHT400 must be filed within 12 months of the end of the month of death, with IHT itself due 6 months after death, and interest accruing from that point on any unpaid IHT.
• Probate application form and the application fee (£300 from 1 April 2025 for estates above the £5,000 threshold), filed online via the Probate Registry's HMCTS portal.
• Statement of truth confirming the applicant is entitled to apply under NCPR 1987 r.22 and renunciations from any higher-priority persons.

The grant typically issues 4-16 weeks from filing, depending on registry workload. Once the grant is in hand, the administrator can deal with the deceased's assets: close the deceased's bank accounts, transfer or sell the property portfolio (the Land Registry requires the grant before processing any title changes), and meet the estate's debts.

Rental income arising during the administration period is taxable in the personal representatives under ITA 2007 s.467 at the basic rate of income tax (20%). The administrators file the estate's income tax return for each tax year the administration spans (typically two to four tax years). At the end of the administration period, when the final distribution is made to the beneficiaries, the beneficiaries receive R185 statements showing their share of the estate's income net of basic-rate tax. Higher-rate or additional-rate beneficiaries pay top-up tax on their marginal slice; non-taxpayers and basic-rate-only beneficiaries can reclaim the basic-rate tax already paid.

The administration period continues until the personal representatives have settled all debts, paid all tax (including IHT, income tax, and any CGT on disposals during administration), obtained the HMRC clearance certificate (IHT421), and made the final distribution to beneficiaries. For a property portfolio with three to five buy-to-lets, this typically takes 18-36 months from death; for a single property it can be 12-18 months; for complex estates with ongoing tenancies or 1975 Act claims, it can stretch to several years.

Worked scenario A: married with adult children, £1.5m portfolio

Mr Williams dies intestate at 71, leaving Mrs Williams (his spouse) and three adult children Sarah, James, and Emma. His net estate after IHT is £1,500,000, comprising:

• Family home (sole name): £600,000.
• BTL portfolio (sole name): three flats at £300,000 each = £900,000.
• Personal chattels: £40,000.
• Other assets: nominal.

The intestacy distribution under s.46 as worked above:

• Mrs Williams: £40,000 chattels + £322,000 statutory legacy + £569,000 half-residue = £931,000 absolutely.
• Each of Sarah, James, Emma: £189,667 absolutely on the s.47 statutory trusts (since all three are adults at the date of death, the trusts vest immediately).

The IHT position. Mr Williams' estate is at £1,500,000. His NRB of £325,000 plus RNRB of £175,000 (his own family home passing on the s.46(1)(i) framework, but the RNRB requires the residence to pass to direct descendants, which the family home only partly does: it forms part of the residue, of which the spouse takes half and the descendants take half, so RNRB is available proportionately on the half-share passing to descendants). The spouse's share of £931,000 is entirely covered by the s.18 spouse exemption (no IHT). The descendants' share of £569,000 attracts IHT after NRB (£325,000) and proportional RNRB (£175,000 × 50% = £87,500), giving £156,500 taxable at 40% = £62,600.

The DoV opportunity. Within two years of Mr Williams' death, the family can execute a deed of variation under IHTA 1984 s.142 to restructure the distribution. The most common DoV in this scenario: vary part of Mrs Williams' £569,000 half-residue share into an immediate post-death interest for her with remainder to the children. The IPDI under IHTA 1984 s.49A is treated as her property for IHT during her life (so the s.18 spouse exemption covers it), but on her death the property in the IPDI passes to the children on a separate IHT event (with NRB and RNRB available on that second-death event). The DoV does not save IHT on the first death, but defers and potentially mitigates the second-death IHT. See our separate pages on the IPDI mechanic and deed of variation for the deeper treatment.

Worked scenario B: unmarried cohabiting, no will

Mr Davis (52, single property landlord) dies intestate. He has been cohabiting with his partner Ms Connolly for 12 years. They have one minor child (Olivia, aged 9). Mr Davis owns a £400,000 BTL portfolio and a £300,000 family home in his sole name; Ms Connolly contributed to the mortgage and house improvements but is not on the Land Registry title.

The intestacy distribution under s.46:

• Ms Connolly: nothing under intestacy. She is not in the statutory order.
• Olivia: the whole net estate (less IHT) on the s.47 statutory trusts contingent on age 18. Trustees hold for her.

The family home, BTL portfolio, and any other Mr Davis assets pass to Olivia. Ms Connolly's position: she is the parent of the beneficiary (Olivia) but has no entitlement of her own. She and Olivia continue to live in the family home, but legal title is held on Olivia's behalf by the trustees. The trustees (typically Mr Davis's parents or siblings appointed under NCPR 1987 r.22) manage the property; Ms Connolly has no formal say.

Ms Connolly's only route to provision is a claim under the Inheritance (Provision for Family and Dependants) Act 1975. As a cohabitant of two years or more (12 years here), she has standing under s.1(1)(ba). The claim must be issued within six months of the grant of letters of administration. The court has discretion on what "reasonable financial provision" means; on these facts a court would likely award significant provision (the family home outright or in life-interest, plus income provision from the BTL portfolio), but the outcome is unpredictable and the litigation expensive (typically £30,000-£60,000 of legal costs).

The deed of variation route. Where Olivia is a minor and cannot consent to a DoV, the DoV would require a court order varying her share (under Variation of Trusts Act 1958 or the inherent jurisdiction of the High Court in some cases). Court-sanctioned DoVs are technical, expensive, and uncertain. The practical answer for Ms Connolly is the 1975 Act claim; the family-side path through DoV is rarely available where minors are involved.

The scenario illustrates why intestacy is described as a catastrophe for unmarried cohabitants: even an obvious moral claim to inherit produces only a discretionary court-route remedy, with substantial cost and uncertainty.

Worked scenario C: widow then adult children, £2.4m portfolio per stirpes

Mrs Patel (76, widowed) dies intestate. She has three children: Anil, Priya (predeceased), and Ravi. Priya has two surviving children of her own, Mira (12) and Arjun (9). Mrs Patel's net estate after IHT is £2,400,000, comprising a £900,000 family home and five BTL flats totalling £1,400,000 plus personal chattels and cash of £100,000.

The intestacy distribution under s.46(1)(ii) (no surviving spouse, issue takes per stirpes):

• Anil: one-third = £800,000 absolutely.
• Ravi: one-third = £800,000 absolutely.
• Priya's share (one-third = £800,000) passes per stirpes to her two children Mira and Arjun in equal shares. Each takes £400,000 on the s.47 statutory trusts contingent on age 18.

The administration mechanics. Anil and Ravi (the two surviving adult children) apply jointly for the grant of letters of administration; their letters appoint them administrators. They are also the trustees of Mira and Arjun's contingent shares under s.47 (or they can appoint other trustees if they prefer). The administration period typically runs 24-36 months for a five-property portfolio.

The IHT position. The estate exceeds the combined NRB of £325,000 plus RNRB of £175,000 substantially. The transferable NRB and RNRB from Mr Patel's earlier death (assuming he predeceased without using his) double the thresholds: £650,000 NRB + £350,000 RNRB = £1,000,000 of total relief. Mrs Patel's death-side IHT is on the residue above £1,000,000 = £1,400,000 at 40% = £560,000.

The DoV opportunity. The children can vary the distribution within two years of death. One common application: Anil and Ravi vary their absolute shares into discretionary trusts for their own families' next-generation IHT planning, capturing the s.260 holdover for any subsequent CGT on disposals from those trusts. Mira and Arjun's shares are already on statutory trusts so a DoV of their shares would require court sanction; the trustees can however apply the s.31 maintenance powers to use income for Mira and Arjun's education and care during minority.

Common mistakes administrators make

1. Citing the £270,000 statutory legacy figure (or earlier figures). The current figure is £322,000 under the 2023 Order. Older calculations produce understated spouse entitlements and overstated issue entitlements. The fix is to verify the current figure from the legislation.gov.uk source rather than relying on pre-2023 secondary sources.
2. Missing the IHT400 deadline. 12 months from the end of the month of death is the filing deadline; 6 months from end-of-month-of-death is when IHT itself is due, with interest accruing from that point on any unpaid balance. For a portfolio estate the IHT400 with all the property valuations and supporting evidence is a substantial document; administrators often underestimate the time.
3. Distributing before clearance. The personal representatives are personally liable for any unpaid tax. Distributing assets before HMRC has issued the IHT421 clearance certificate leaves the administrators on the hook for any subsequent tax assessment. The standard fix is to hold back a reserve against potential HMRC adjustment until clearance is in hand.
4. Missing the two-year DoV window. Many post-death tax-planning opportunities exist within the two-year deed-of-variation window under IHTA 1984 s.142. The window closes at the second anniversary of death and cannot be extended. Administrators who do not flag the DoV options to beneficiaries lose substantial planning value.
5. Distributing before the 1975 Act six-month deadline expires. Where there is a potential 1975 Act claimant (unmarried partner, dependant, anyone in the s.1 categories), the administrators should hold the estate for the six-month period from grant before final distribution. Distributing earlier leaves the beneficiaries exposed to a claw-back claim if the 1975 Act applicant succeeds.
6. Failing to maintain tenancies properly. Pre-existing rental tenancies continue post-death; the personal representatives become the landlord. Section 21 / Section 8 notices, deposit protection, gas safety certificates, and EPC obligations continue. Administrators who treat the tenancies as suspended during administration produce regulatory breaches and tenant disputes that can outlast the administration itself.

Where the post-death tools fit

The intestacy distribution is what the statute hands you; the deed of variation under IHTA 1984 s.142 is the standard post-death tool to reshape that outcome. Within two years of death, the beneficiaries can vary the distribution by deed; the variation is treated for IHT (and, where the deed includes the s.62(6) election, for CGT) as having been made by the deceased rather than by the beneficiary. Common DoV applications for intestate estates include: varying part of the spouse's share into an IPDI structure to capture RNRB and create a will-equivalent two-generation structure; varying the issue's share into a discretionary trust for governance flexibility; varying part of the spouse's share to an unmarried partner to put the partner in the position they would have had under a properly drafted will.

The DoV is the single largest post-death lever, and missing it (because the administrators or beneficiaries do not know about it, or the two-year window expires before action) leaves the family with whatever the intestacy distribution produced. Our existing pages on the deed of variation and on the IPDI mechanic walk the DoV mechanics and the IPDI-from-DoV structure in detail. For the general inheritance-administration walkthrough that applies to both will-based and intestate estates, see inheriting UK rental property: step-by-step.

Closing the loop

Intestacy is the default outcome of doing nothing, not a planning choice. The statutory order under AEA 1925 s.46 (as amended by ITPA 2014) is rarely what the deceased would have written, particularly for landlords with substantial portfolios, blended family situations, or unmarried cohabitating partners. The £322,000 statutory legacy is the current figure under the 2023 Order; pre-2023 content carries stale figures that should be corrected. The administrator's job is to apply the statutory order accurately, manage the administration period to completion, navigate any 1975 Act claims, and flag the deed-of-variation window to beneficiaries before it expires. The cleanest defence against the intestacy mess is, as always, a properly drafted will; the second-best defence is competent post-death tax planning within the two-year DoV window.