Inheritance tax has to be paid by the end of the sixth month after death — and usually before your executors can get probate. But without probate, most of the estate’s money is frozen. That is the executor’s catch-22.
The ways through it:
- Direct Payment Scheme — banks, building societies and many investment providers can pay HMRC straight from the deceased’s accounts, using form IHT423.
- Yearly instalments — tax on land, buildings and some business shares can be spread over ten years. Interest-free for assets qualifying for Business Relief or Agricultural Relief from April 2026; interest on the outstanding balance for let property and similar assets.
- Borrowing, or asking HMRC to wait — a loan, or postponement until the grant where funds genuinely cannot be reached.
Late payment interest is currently 7.75%.
The real answer is planning ahead: life cover written in trust sized to the likely bill, liquid funds in the right place, and Business Relief properly structured.
Read the full article on our website →
Get Legacy Insights free every Sunday
Six short reads each week on tax, Wills, family wealth and running a business, from John Ireland. Since 1996, three decades of protecting families.