Can advisers rely on a grant on credit for clients?

Whenever I talk to advisers about estates that have an Inheritance Tax bill to pay but not enough cash available to pay it, a grant on credit will sometimes come up.

And rightly so. If you can get one, it can be a very good option.

For anyone less familiar with them, a grant on credit essentially allows the Grant of Probate to be issued before all of the IHT has been paid. That can give the executors the ability to access or sell assets within the estate and then use that money to pay the outstanding tax.

For an estate with a valuable property but not much sitting in the bank, you can probably see why that could be useful.

It can also be cheaper than taking out probate finance, so it’s absolutely something I’d want an adviser or executor to explore where it’s appropriate.

Where I’d be slightly more cautious is relying on one before HMRC has actually agreed to it. After all, a grant on credit can be quite hard to secure, so if the plan for paying IHT relies on getting it, you might want a plan B.

That’s where our Probate Loans really come into their own. By giving executors the opportunity to release up to 50% of the net value of the estate within days, they can pay IHT without needing to jump through HMRC’s hoops.

If you want more information on how we can help, book in a call with the team.

Grants on credit are easier to apply for than they used to be, but that doesn’t mean they’ll be approved

One thing that has made grants on credit easier to apply for is a rule change that came in from April 2024.

Before then, executors needed to show HMRC that they’d tried to borrow the money through a commercial loan before applying. In other words, you could have an estate worth £1 million, most of it tied up in a house, and still be expected to look at taking out a loan to pay the IHT first before relying on a grant on credit.

That has now changed, which I think makes sense.

If there’s £700,000 sitting in a property, the estate isn’t short of money. The problem is that the executor can’t get to that money yet. A grant on credit can potentially solve that by allowing probate to move forward so the assets can be sold and HMRC can then be paid.

But this is the important bit: easier to apply for doesn’t mean guaranteed to get.

HMRC will still want to know why the estate can’t pay the tax, how much can be paid now and where the rest of the money is going to come from once probate is granted.

So I’d absolutely consider a grant on credit for the right estate. I just wouldn’t build the whole plan around getting one until HMRC has actually said yes.

How likely is a grant on credit to actually be approved?

This was one of the first things I wanted to know when we started looking more closely at this. How many people apply, and how many actually get approved?

Surprisingly, I haven’t been able to find a published HMRC figure that answers that question. HMRC publishes a huge amount of information around Inheritance Tax, but there doesn’t appear to be an official application-versus-approval rate for grants on credit.

I think that’s quite important when you’re talking to clients about their options. Without that information, I wouldn’t want to tell an executor that getting a grant on credit is likely or unlikely. I’d look at the estate in front of me.

What assets are there? Why can’t the IHT be paid? How much can the executors pay now? What’s going to happen once probate is granted? And how confident are we that the outstanding tax can then be settled?

Those are much more useful questions than trying to put a percentage chance on the application.

The other thing to remember is that the IHT hasn’t gone away

This sounds obvious, but I think it’s worth making clear to clients. A grant on credit doesn’t remove the IHT liability, it just gives the estate more time to pay it.

And if IHT remains unpaid after the normal payment deadline, interest can continue to be charged. 

In some cases, that isn’t really a problem. For example, if there’s already a buyer for a property and the executors just need the grant to get the sale over the line, that’s quite different from an estate where the house isn’t even on the market yet.

We’ve spoken before about the importance of looking at liquidity rather than just estate value, and I think the same principle applies here.

The fact that there’s enough money somewhere in the estate to pay HMRC eventually doesn’t necessarily solve the problem the executor has today.

What I’d be careful about is making it the only plan

This is probably where I’d focus if I were advising an executor or a client who is estate planning.

If a grant on credit looks like it might be a good option, explore it. If it works and saves the estate the cost of borrowing, that’s a good place to be. But I’d still want to know what we’re going to do if it doesn’t.

Say there’s a £150,000 IHT bill, £50,000 of accessible cash and the rest of the estate is tied up in property. The executor might apply for a grant on credit for the balance. At the same time, I’d want to understand what other options are available.

Is there money in the deceased’s bank or building society accounts that can be paid directly to HMRC? Are there other assets that can be accessed? Is any of the IHT eligible to be paid by instalments?

And if none of those things gets you far enough, what would probate finance look like? You don’t necessarily need to use it, you might never need it.

But I wouldn’t want the first conversation about alternative funding to happen after an application has already been refused and the executor is wondering what to do next.

This is where an Estate Advance can be useful

At Provira, we deal with this problem from the other direction.

Rather than waiting for estate assets to become accessible, our Estate Advance allows executors to access some of that value earlier, including where money is needed to deal with an IHT liability.

There are no monthly repayments, and the advance is repaid from the estate when funds become available.

I’m not going to tell advisers that an Estate Advance is always a better option than a grant on credit, because it isn’t. If HMRC is happy to issue the grant, the estate can then realise its assets quickly and the numbers make sense, a grant on credit could be a very good route.

But there will also be estates where the executor wants more certainty, where the application isn’t so simple or where waiting for an answer creates another delay they could do without.

That’s when I’d want advisers to know that another option exists.

So, can you rely on a grant on credit?

I’d probably phrase it slightly differently. Can you consider one? Absolutely. Should you assume you’ll get one? I wouldn’t.

For me, it comes back to understanding the estate and having the conversation early enough that there are still options available.

If you have an executor struggling to work out how an IHT bill is going to be paid, look at the grant on credit route. Look at what cash can already be accessed from the estate. Look at instalments where they’re available.

But also work out what happens if those options don’t solve the whole problem. That’s where we’re always happy to help.

If you have an illiquid estate and you’re trying to work out whether an Estate Advance might be useful alongside, or instead of, a grant on credit, book a call with the Provira team and talk us through it.

You don’t need to know the answer before you call. That’s exactly the sort of case we’re happy to look at with you.

About Provira

Provira is the UK’s most established provider of inheritance and estate advances, trusted by hundreds of financial advisers and brokers. We’ve supported thousands of families, advancing £20,000 to over £1 million to help cover IHT, legal fees and personal needs – quickly, securely, and without personal guarantees or property charges.

We work closely with introducers and can provide everything from referral copy to co-branded materials. All you need to do is make the introduction – we’ll take it from there.