If the estate can’t afford to pay Inheritance Tax, it will be charged interest, incur penalties, and it won’t be able to obtain probate or distribute assets to beneficiaries.

As an executor, the pressure of paying off Inheritance Tax before the 6-month deadline can weigh heavy on your shoulders, particularly if you’re
struggling to work out how to cover the cost.

Luckily, you have options. From HMRC schemes to loans, if immediate funds aren’t available in the estate, there is always an answer.

At Provira, we know how much this stress can impact your life. That’s why we’re so proud that our Estate Advance can offer so many families a way forward.

Designed specifically for executors to cover any urgent expenses such as Inheritance Tax payments, our Estate Advance gives you access to up to 50%
of the estate value within just one week.

Plus, we deal with all HMRC payments directly, don’t charge early repayment fees, there’s no personal liability, and the loan is only repaid once all
funds have been released from the estate.

To find out more about our Estate Advance, click here

How much Inheritance Tax do I need to pay?

It depends on the value of the estate. This is worked out by assessing everything that the estate owns, from how much cash is in the bank to investments, property and physical assets such as personal items.

The standard rate of Inheritance Tax currently sits at 40%.

However, this is only applied to everything above the tax-free allowance, or nil rate band.

The nil rate band allows up to £325,000 of the estate to be tax-free. This can also be combined with another tax-free allowance called the residence nil rate band. If you leave your main home to children or grandchildren, you add an additional £175,000 to your tax-free allowance. This allows the estate to pass on up to £500,000 tax-free.

For example, if the total estate is valued at £600,000, the first £325,000 is tax-free.
Then, if you were to combine it with the residence nil rate band, that takes the tax-free amount to £500,000.

Therefore, only the remaining £100,000 would be subject to 40% Inheritance Tax, settling the tax bill at £40,000.

There are also ways that the estate may have managed to reduce the amount of Inheritance Tax that needs to be paid which include:

Gifting

If you gift part of your estate over your lifetime, it is an easy way to reduce how much Inheritance Tax will need to be paid, as it brings the total value of the estate down. Financial transfers are regarded as gifts as long as they take place more than seven years before the date of death. It requires a bit of foreplanning, but is a common way to reduce your Inheritance Tax bill.

Leaving an estate to a civil partner or spouse

If an entire estate is left to a civil partner, it is passed on entirely tax-free. Plus, as the tax-free allowances are applied to each person, the first partner to die can transfer their unused allowance to the second, increasing the amount that is tax free. This means that if both partners allowances are combined, up to £1 million can be left tax-free to children and grandchildren.

Estate planning

By creating a proper will and clearly laying out how all of your assets will be managed after you pass away, you can make the distribution of the estate
a lot more efficient, on both a practical level and tax-wise. If not, the law decides who inherits what, which can drive up the amount of tax paid.

Giving to charity

If you leave more than 10% of your estate to charity, the IHT could be reduced from 40% to 36% which saves a lot of money, particularly for larger estates.

These choices are important to consider both in working out how much Inheritance Tax you owe and in preventing your own estate from being hit with a high Inheritance Tax Bill.

Think your estate can’t afford to pay Inheritance Tax?

Reach out to our team today and we’ll walk you through your options.

Do you have to pay Inheritance Tax before probate?

Yes, you do. And this is what usually causes the most amount of stress for executors.

The payment deadline for paying IHT is the end of the 6th month after death.

Often, the funds needed to cover the cost are tied up in the estate.

But, as you can’t release funds until probate is complete, and you have to provide payment before you can even apply, it can feel like a hopeless situation.

That’s where Provira can step in and help.

When you’re going through a difficult time, paying off Inheritance Tax shouldn’t be adding to your grief.

Our Estate Advance opens doors for executors by giving access to up to 50% of the estate’s value almost immediately so you can cover IHT, and any other
pressing estate expenses like legal fees.

Plus, we handle all HMRC payments directly, don’t charge early repayment fees, you’re not personally liable for the loan and there are no monthly repayments.

Reach out to our team and apply for an Estate Advance today.

Can you pay Inheritance Tax in installments?

Yes, you can pay Inheritance Tax in installments, but it will be tied to a specific asset. These include land or property, selected business assets, and certain shares.

This is because if the estate is illiquid – meaning its value sits in assets that won’t immediately provide cash – it will need a longer timeline to cover the cost of Inheritance Tax while the asset is waiting to be sold.

If HMRC approves the request for Inheritance Tax to be paid in installments, it will split the total into 10 equal parts with each due on the same date each year.

As IHT is usually due upfront, the estate will be charged daily interest on the outstanding amount.

It’s also worth noting, as soon as the asset is sold, the remaining amount of Inheritance Tax due must be paid immediately.

Are executors personally liable for Inheritance Tax?

Yes, they are. This is why, if you are named as an executor of an estate, it’s important to have the right legal guidance and support.

An example of when an executor might find themselves personally liable for Inheritance Tax is if they were to distribute assets too soon.

Paying out inheritance to beneficiaries is the final step in the probate process, but if an executor passes on the estate to the beneficiaries and there is still tax due to HMRC, they might be personally liable to then cover the remaining cost.

At Provira, we understand the concerns that surround what is so often an incredibly confusing and emotional time. That’s why our Estate Advance provides executors with a simple solution.

It grants you access to up to 50% of the total value of the estate within days, and we handle all payments to HMRC directly, require no monthly payments and charge you no early repayment fees.

Plus, one of our compassionate members of our team will be dedicated to your case to guide you through it every step of the way.

To find out if you’re eligible, apply today.

How long does probate take if there is no Inheritance Tax?

This can help to shorten the probate timeline.

Probate typically takes between 6-12 months for simple estates, slightly less if there’s no property involved. So if there is no Inheritance Tax due,
it reduces the amount of administrative work which could cut the probate timeline down to just 3 months.

This is hard to predict though as every timeline is based on the specifics of each estate.

Key factors that affect probate timelines, even without Inheritance Tax are:

• Estate size and assets
• Credit claims
• No Will
• Bank delays
• Executor efficiency

Probate timelines can vary based on many different reasons. If you are stuck in a slow probate process and have urgent estate expenses to cover, having
access to up to 50% of the total estate value with our Estate Advance could help.

Find out more about our Estate Advance here

How Provira helps if the estate can’t afford to pay the Inheritance Tax

Many executors come to us as they’re wading through a complex estate with all of its funds tied up in assets, meaning they won’t be able to meet the
6-month Inheritance Tax deadline.

And, as not paying on time can land the estate with penalties, interest charges and added administrative pressure, it can feel like there’s no
simple way forward.

But with our Estate Advance you can:

• Pay off your Inheritance Tax immediately
• Avoid penalties and interest
• Prevent added stress for executors
• Keep the probate process moving forward

And it does this by:

• Giving you access to up to 50% of the total value of the estate
• Transferring the money within just a week
• Ensuring no personal liability for the loan
• Not charging for early repayment
• Being repaid in full only once the funds have been released from the estate

If the HMRC 6-month deadline is looming and the estate can’t afford to pay Inheritance Tax, speak to Provira today, our team is here to help.