IHTM12091 - Succession: The incidence of debts and legacies: Debts charged on property

The Administration of Estates Act 1925/ S35 applies to all property, which at the time of the death of the deceased is charged with the payment of money. It provides that, so far as beneficiaries claiming through the deceased are concerned, the property on which the debt is charged is primarily liable for the payment of the debt. If the amount of the debt is greater than the value of the asset, the creditor will be entitled to the balance out of the other assets of the estate.

This means that, unless any contrary intention is expressed in the Will or in any other deed or document, a beneficiary of freehold or leasehold property will take it subject to any mortgage or other specific charge outstanding as at the date of death.

This only applies to the extent that the debt is actually charged on the property.