Can you pay your Inheritance Tax partially?
You can pay your Inheritance Tax (IHT) bill partially or in instalments depending on what the estate contains.
Estate Liquidity Knowledge Hub
Inheritance Tax is one of the most common reasons estates experience liquidity pressure during probate. In many cases, tax obligations arise before assets can be realised or distributed.
This hub explains how Inheritance Tax operates in practice, and how timing differences between liabilities and asset accessibility can create challenges for executors, beneficiaries and advisers.
Find the guidance that applies to you
Executors & Beneficiaries
Understand how Inheritance Tax affects estates, what executors are responsible for, and how it can influence when funds become available.
Advisers & Introducers
Guidance for IFAs, brokers and solicitors supporting clients where tax obligations create estate liquidity considerations.
What is Inheritance Tax?
Inheritance Tax (IHT) is a tax applied to the value of a person’s estate after they die. An estate may include property, savings, investments and other assets. In the UK, the standard rate is typically 40% on the portion of the estate above the available tax thresholds, although exemptions and allowances may apply depending on the structure of the estate.
Inheritance Tax is typically payable within six months of the date of death, in line with HMRC requirements. In many cases, a portion of the tax must be settled before a grant of probate can be issued. This can create practical challenges, as executors may need to arrange payment before assets such as property or longer-term investments can be sold or accessed.
While HMRC guidance explains how Inheritance Tax is calculated and paid, it does not always address how executors should manage situations where funds are not readily available. As a result, estates can experience a mismatch between value and liquidity, where assets exist but cash is not immediately available.
DID YOU KNOW?
Inheritance Tax may need to be partially settled before a grant of probate is issued, meaning executors can be responsible for arranging funds before they are able to access or distribute the estate.
STANDARD INHERITANCE TAX RATE
40%
The standard Inheritance Tax rate is typically 40% on the portion of an estate above the applicable thresholds. Allowances such as the nil-rate band and residence nil-rate band may reduce the overall liability, depending on the structure of the estate. Thresholds and allowances are set by HMRC and may change over time.
Key Inheritance Tax Facts
Inheritance Tax is typically charged at 40% above applicable thresholds
Payment is generally due within six months of the date of death
Executors are responsible for calculating, reporting and arranging payment of the tax
A grant of probate is often required before assets can be distributed
Property and other liquid assets can delay access to funds
Tax liabilities may arise before estate assets can be realized
Why Inheritance Tax Can Create Estate Liquidity Challenges
Many estates derive a significant proportion of their value from assets that cannot be quickly converted into cash. Property, business interests and longer-term investments are common examples.
Inheritance Tax obligations, however, follow a defined timeline. Executors may be required to arrange payment before these assets can be realised, particularly where a grant of probate has not yet been obtained.
This timing mismatch is a key reason why estates that appear valuable on paper can still experience liquidity pressure in practice. It is also a scenario frequently encountered by advisers supporting clients through estate administration, where decisions may need to be made about how obligations are met before assets are distributed.
Payment deadlines are fixed
Inheritance Tax timelines do not necessarily align with how quickly assets can be sold or accessed.
Executors carry responsibility
Executors are responsible for ensuring that Inheritance Tax is calculated and paid, even where funds are not immediately available within the estate.
Asset accessibility can vary
Property and certain investments may take time to realise, particularly during the probate process.
Managing Director, Provira
“Many estates are asset-rich but cash-poor. Executors are often required to meet tax obligations before assets can be sold, which is where liquidity challenges arise during probate and where careful planning or interim solutions may need to be considered.”
Steve Gauke
Managing Director, Provira
Managing Director, Provira
“Many estates are asset-rich but cash-poor. Executors are often required to meet tax obligations before assets can be sold, which is where liquidity challenges arise during probate and where careful planning or interim solutions may need to be considered.”
Steve Gauke
Managing Director, Provira
Common Estate Scenarios
Scenario 1
Property-Heavy Estates
Where a significant portion of value is tied up in property, executors may need to address tax obligations before a sale can realistically be completed.
Scenario 2
Multiple Beneficiaries
Tax obligations may need to be managed before assets can be divided and distributed across beneficiaries, which can affect timing and expectations.
Scenario 3
Business or Investment Assets
Private business interests or investment portfolios may form a substantial part of the estate but may not be easily liquidated within required timeframes.
Scenario 4
Delays in Probate
Where probate takes longer than expected, tax obligations may still need to be addressed within standard deadlines.
Comprehensive Guide
Understanding Inheritance Tax and Estate Liquidity
A practical guide to how Inheritance Tax operates in the UK, when it becomes payable during probate, and how timing differences can affect access to estate funds.
Guidance for Advisers & Introducers
Inheritance Tax can introduce liquidity considerations that advisers may need to address when supporting clients through estate administration. Understanding how and when these issues arise can help inform discussions around timing, obligations and potential approaches to meeting liabilities.
Where appropriate, solutions such as estate advances or probate lending may be considered as part of a wider strategy.
How inheritance tax changes are creating new estate liquidity challenges
Inheritance tax reforms are expanding the number of estates exposed to IHT and creating new liquidity challenges during probate. See how advisers can identify timing gaps and support clients without disrupting long-term plans.
How being married can save you paying Inheritance Tax
Being married (or in a civil partnership) can save you paying Inheritance Tax as you can pass assets tax-free and combine tax-free allowances.
See More
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.
What items are exempt from inheritance tax?
There are a number of items that are exempt from inheritance tax in the UK which revolve mostly around gifting and charitable donations.
Can I get an Inheritance Tax bridging loan?
Yes, you can get a bridging loan to help you pay Inheritance Tax (IHT). These loans are designed to cover IHT, which is due within 6 months.
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.
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.
Can you pay your Inheritance Tax partially?
You can pay your Inheritance Tax (IHT) bill partially or in instalments depending on what the estate contains.
Guidance for Executors & Beneficiaries
Executors and beneficiaries may encounter situations where funds are not immediately available, particularly where tax obligations arise before assets can be accessed or sold. These resources explain what to expect and how Inheritance Tax can influence the timing of estate administration.
What does a probate lawyer do and do you need one?
A probate lawyer, or probate solicitor, manages the legal and financial administration of a deceased person’s estate.
Can an executor take out a loan on behalf of the estate?
Yes, an executor can take out a loan on behalf of the estate, but only when the loan is put towards the estate’s interests, not their own.
When executors should consider estate advances
Executors should consider an Estate Advance when they need to cover estate costs like Inheritance Tax, but don’t have access to any funds.
See More
Can you get a loan against your inheritance?
Yes, you can get a loan against your inheritance. This is called an Inheritance Advance and allows you to access the money before probate.
Can an executor take out a loan on behalf of the estate?
Yes, an executor can take out a loan on behalf of the estate, but only when the loan is put towards the estate’s interests, not their own.
How to speed up the Probate process
The best way to speed up the probate process is to be very prepared with all the necessary documents and to submit them to the correct authority without delay.
When executors should consider estate advances
Executors should consider an Estate Advance when they need to cover estate costs like Inheritance Tax, but don’t have access to any funds.
How Inheritance Tax is handled for family businesses
Family businesses must pay Inheritance Tax when assets are passed down through the estate.
Can Giving Money To Charity Reduce My Inheritance Tax Bill?
Yes, giving money to charity can reduce your inheritance tax (IHT) bill. In the UK, charitable donations are exempt from inheritance tax,
Expert Insights & Webinars
Provira’s team of estate finance specialists share their knowledge to help advisers and families navigate estate liquidity challenges.
Webinar Recording
Estate Liquidity Under the New IHT Rules
What’s changing in 2026, how new pension rules
affect IHT exposure and the implications for estate
planning.
Inheritance Tax is a common source of estate liquidity pressure, particularly where obligations arise before assets can be realised.
Understanding how these situations develop can help executors, beneficiaries and advisers make informed decisions during probate.
FAQ's
In certain circumstances, tax relating to specific assets such as property may be paid in installments. However, an initial payment is often required.
Executors may need to consider how funds can be arranged, which could involve asset sales, borrowing or other approaches depending on the estate.
In most cases, estates cannot distribute assets until tax obligations have been addressed and probate requirements have been met.
Executors are responsible for ensuring that Inheritance Tax is calculated, reported and paid.
Inheritance Tax is typically payable within six months of the date of death.
Not all estates are liable for Inheritance Tax, as thresholds, exemptions and allowances may reduce or remove the liability depending on the circumstances.