Paying inheritance tax in instalments – what you need to know
You can pay Inheritance Tax in instalments over 10 years if you owe tax on illiquid assets. However, but you will be charged interest.
IHT & Estate Liquidity
How and when to pay Inheritance Tax
Paying Inheritance Tax (IHT) is very important. HMRC has strict deadlines, and these can be before money from the estate is released.
How to reduce your Inheritance Tax bill
You can legally reduce your Inheritance Tax bill through gifting, using trusts, and understanding your tax-free allowances.
What is estate planning?
Estate planning is the process of deciding how your assets, like property, money and investments, will be distributed after you pass away.
Do beneficiaries pay Inheritance Tax in the UK?
No, beneficiaries don’t pay Inheritance Tax in the UK. Inheritance Tax is paid by the executor of the estate of the person who has passed away.
How much of an estate do you get tax-free?
In the UK, you can pass on up to £325,000 of your estate tax-free, and in some cases, this goes up to £500,000 if you leave your home to children or grandchildren.
When is your Inheritance Tax due?
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.
How much do Britons pay in Inheritance Tax each year?
During the 2024–25 tax year, Britons paid a record £8.2 billion in Inheritance Tax, up from £7.5 billion in the previous year.
When do you not have to pay any Inheritance Tax in the UK?
You do not have to pay Inheritance Tax in the UK if the value of the estate you inherit is less than certain thresholds.
What happens if you can’t pay your inheritance tax bill?
HMRC will start charging interest on the outstanding amount from the due date. This is usually six months after the person’s death.
