In the UK, Inheritance Tax is due within 6 months of the person’s death. If the tax isn’t paid on time, HMRC may start charging interest on the balance, which can quickly add up.

Whilst this deadline might seem long, it’s very common for Inheritance Tax to be due before probate is granted.

For many, having to pay out a large sum at such a difficult time can feel very stressful, especially if you are coping with a recent loss.

At Provira, we offer a loan of up to 50% of your estate value, so you never need to worry about paying Inheritance Tax late.

Speak to the team today to find out more about how Provira can help you pay your Inheritance Tax on time.

Making sure you know when Inheritance Tax is due

In many cases, given how long the probate process can take, Inheritance Tax might need to be paid before the money in the estate is available.

In the UK, the standard Inheritance Tax rate is charged at 40% on any part of the estate that is above the tax-free threshold of £325,000.

So, say you have an estate worth £1,000,000. £325,000 of this is tax-free, with the remaining £675,000 subject to 40% Inheritance Tax.

This payment is due at the end of the 6th month after the person passes away, and applies to all assets in the estate, not just money.

If you miss this deadline, HMRC might start charging interest. And with the current interest rate sitting at 8%, failing to pay on time could cost the estate thousands of pounds.

For many people, this can add a lot of financial stress during a difficult personal time. 

Do you have to pay Inheritance Tax before probate?

Yes, in many cases, you will have to pay at least part of the Inheritance Tax to HMRC before probate.

The reason that this can be tricky is that probate allows executors to sell assets in the estate, releasing the funds. Before these assets are sold and the money is released, it can be hard to have the cash ready to pay the Inheritance Tax.

Luckily, there is another option. At Provira, we offer Estate Advances, which allow you to access up to 50% of your estate value quickly, so you can release some pressure and get your Inheritance Tax paid on time. Speak to the team today!

What assets do you have to pay Inheritance Taxes on?

In the UK, Inheritance Tax applies to all valuable assets inherited, including:

• Property and land
• Cash
• Stocks, bonds and shares
• Personal items like jewellery, art, antiques, cars and more.
• Life insurance payouts
• Business assets
• Gifts given within 7 years before death.

However, if you’re unsure if an item counts, it’s always worth speaking to a professional to make sure you are covered.

What if you don’t have the money to pay the Inheritance Tax?

Not having the money to pay Inheritance Tax can be an incredibly stressful situation. In many estates, wealth can be tied up in property or investments where the money can’t be drawn down straight away.

From HMRC’s perspective, they still expect the Inheritance Tax payment to be made on time, and if it isn’t, then the interest clock starts.

In this case, it might be worth exploring alternative options. The last thing you want to do is accumulate interest on the tax, so finding specialised Estate Advances like Provira’s can be a great option.

Can you pay Inheritance Tax in instalments?

Sometimes. HMRC allows certain assets, like property, to be paid in instalments of up to 10 years. However, this comes at a price.

Interest is charged on the unpaid balance throughout the instalment period. As interest rates can go up and down quickly, this can provide a lot of financial uncertainty. 

Additionally, if the property or asset does end up selling, then all remaining tax (plus interest) has to be paid off immediately.

So in short, instalments can release a bit of pressure in the short-term, but may actually end up costing much more overall.

Can you pay Inheritance Tax early?

Yes, you can. Many executors choose to pay part of the Inheritance Tax bill early; this is called payment on account.

Executors choose to do this because it lowers the amount of interest HMRC can charge if it takes longer to sell some assets, like property.

This can be a good move because paying something towards the bill early can stop interest from building up over time, even if some of the money is still tied up.

How do you pay Inheritance Tax?

If you manage to pull the funds together, then Inheritance Tax can be paid from either:

• The deceased person’s bank account through the Direct Payment Scheme
• From your own bank account
• Through a cheque or online form
• Or in installments through HMRC – though interest applies!

Before you pay Inheritance Tax, you will need a reference number from HMRC, which takes about 3 weeks to process. Once you have that, HMRC will be able to link your number to the estate. 

Paying Inheritance Tax with Provira

At Provira, we understand that dealing with your estate isn’t easy. With tight deadlines and big payments to make, it can be a very stressful time.

That’s why we offer specialised Estate Advance Loans so that you can access up to 50% of your estate early to pay off your Inheritance Tax.

Our team is here to help you navigate this challenging time.

Want to find out more? Speak to the team today.