Inheritance Tax is paid before probate by either using your own funds, HMRC-approved referrals, a Direct Payment Scheme or taking out a specialist loan. As there is a strict deadline from HMRC for when it must be paid by, it’s important to know your options around how to pay it.

Inheritance Tax has to be paid by the executor of an estate before probate is granted. As an executor, you may find yourself in a tricky situation where the funds needed to cover the cost of Inheritance Tax are still locked in the estate, and without probate, you aren’t able to access them.

At Provira, we know the huge financial and emotional burden this can be. 

That’s where our Estate Advances come in, offering you access to up to 50% of the total net value of the estate within days, so you can pay Inheritance Tax and move forward with probate.

Find out more information about our Estate Advance here.

Do you pay Inheritance Tax before probate is granted?

Yes, Inheritance Tax (IHT) must be paid before you can apply for probate. That said, executors often need probate to be granted in order to access the funds in the estate to be able to pay, so it can feel like an impossible obstacle.

At Provira, our Estate Advance is designed for exactly this moment. We allow executors to access up to 50% of the estate’s net value within days, allowing them to pay Inheritance Tax quickly and get the probate process moving.

If you have questions around how to pay Inheritance Tax before probate, our team is here to help.

Reach out to us today.

How do I know how much Inheritance Tax to pay?

Inheritance Tax is 40% of the total value of the estate that sits above the tax-free threshold. 

It’s always worth speaking to a professional to find out what you owe, but in short: The tax-free threshold is currently £325,000 and, if a home is left to children or grandchildren, this threshold can increase to £500,000. 

Spouses are able to combine their allowances and transfer assets between them tax-free, meaning each family could access up to £1,000,000 tax-free. Anything above this is taxed at 40%.

How quickly do you have to pay Inheritance Tax?

Inheritance Tax must be paid within 6-months of the date of death. If you are unable to pay by the due date, HMRC will start to charge interest daily, so it’s important to figure out the best way to pay well before this deadline. 

Importantly, you can pay in instalments if the estate includes property, but HMRC needs to approve this request and it isn’t allowed in every situation.

If you’re concerned about how to meet the 6-month payment deadline, reach out to our team. We’re here to answer any question, big or small.

How can I pay for Inheritance tax?

You can pay for Inheritance Tax in a few different ways: 

Direct Payment Scheme

Executors can request money from the estate owner’s bank or building society in order to cover Inheritance Tax. 

This is called a Direct Payment Scheme and is often the simplest way to pay, however, it requires the estate owner to have enough funds in their bank to cover the total cost of Inheritance Tax.

Use your own funds

You can loan your own money to cover the Inheritance Tax in the short term, and then have the estate repay you when the funds are released after probate is granted. 

It is important to only choose this route in full awareness that the probate process can often be unpredictably long, so you might not receive the funds back for a while.

Deferrals 

If the estate is made up of property or business assets, in some specific cases Inheritance Tax payments may be able to be deferred or paid in equal instalments. However, HMRC needs to approve this request and it isn’t possible on every estate.

Specialist loans

You can either take a regular bank loan to cover the cost or use a Probate Loan company such as Provira, to support you in accessing funds. 

The advantage of choosing a probate loan, such as our Estate Advance, is that we are specialists, providing knowledgeable support and guidance, quick turnarounds, do not charge compound interest, no need for credit checks, and the opportunity to access up to 50% of the total estate value in just a few days. 

To discuss your options, contact our team today.

How to pay Inheritance Tax when funds are locked

If there are not enough funds available to pay Inheritance Tax, a probate loan offers a short-term solution. 

Taking out a probate loan enables you to access a percentage of the estate value – our market-leading Estate Advance gives you up to 50% – to cover this kind of urgent cost. 

Not only that, but through charging simple interest, not compound, speedy turnarounds – funds can often be received in days – and a dedicated underwriter team member to guide you through it, our Estate Advance removes stress and confusion from the process.

Find out more about our Estate Advance here

Can you delay paying Inheritance Tax?

Yes, you can delay paying Inheritance Tax in some cases, but it’s often only for certain exceptions and they come with specific conditions:

• 10-year instalment plan: If an estate holds value in assets such as property or land, they might qualify for a 10-year instalment plan. As this plan comes with interest, it is often best to pay it off as soon as possible. 
• Grant on credit: You can apply to postpone the payment if you do not have the funds immediately available. You are still required to pay as much as possible before this is approved, and a timeline to payment will be mapped out for you. This option involves interest, so it can add up quickly.

Are executors personally liable for paying Inheritance Tax?

Yes, executors are personally liable for paying Inheritance Tax, which often puts pressure on the repayment process. This is also why executors should always seek professional legal and tax advice if they’re dealing with estates liable for Inheritance Tax. 

For example, an executor must never distribute the funds of the estate before Inheritance Tax has been paid, otherwise they could be held personally responsible. 

Taking out an Estate Loan with Provira to cover Inheritance Tax payments comes with not only our industry knowledge, but also our trusted partners who are there to handle all HMRC payments on your behalf, taking the stress out of the process.

For more information, speak with our team today.

How to pay Inheritance Tax before probate online

How you pay Inheritance Tax online depends on how you are paying it. In every instance, the form you are required to complete is an IHT400.

If you have the funds available, you can pay from your bank account using your reference number from HMRC.

If you use a Direct Payment Scheme, you fill in form IHT423 for each bank that will make a payment and send this to them when you send off your full tax return (form IHT400) to HMRC. After receiving your IHT400 form or the payment, HMRC will confirm you’ve paid enough by sending a code. This code is required to complete probate.

When you take out an Estate Advance with Provira to pay Inheritance Tax, all of these details are handled for you by our team. 

This is just one of the ways in which our Estate Advance has been designed to not only provide a speedy financial solution, but also to provide a fair and compassionate service through low interest rates and a dedicated team member to guide you through your case.

 Get in touch with our team here

Paying Inheritance Tax before probate

At Provira, we understand that the pressure of paying off Inheritance Tax can cause a lot of stress and confusion. Delays to probate, risk of high interest and penalties for missed payments add a lot of pressure to the process.

That’s why our Estate Advance offers a simple solution, relieving these concerns. 

We offer:

• Up to 50% of your net estate value being accessible within just a few days
• We work directly with your solicitors to make sure Inheritance Tax is paid on time
• Simple interest charges, not compound
• No early repayment fees
• An underwriter dedicated to your case to guide you through it

With Provira, we help families all over the UK move forward with confidence.

Start your application for an Estate Advance today.