One of the most common questions we get at Curtis Legal is whether inheritance tax has to be paid before probate is granted. The answer is yes — at least some of it. This is one of the trickiest parts of the probate process because executors often need to find tens of thousands of pounds before they can access the very assets that will pay the tax bill.
This guide explains exactly how the rules work, what the deadlines are, and the practical options for paying inheritance tax when the estate’s cash is locked up.
Plain-English guide written by Simon Jenkins — covering every stage of the probate process.
The basic rule: IHT must be paid before probate is granted
HMRC will not allow the Probate Registry to issue a grant of probate until any inheritance tax due on the estate has been paid — or at least the portion that cannot be deferred. This is why so many executors find themselves stuck: they need probate to access bank accounts, but they need to pay tax first to get probate.
When is inheritance tax due?
- Six months from the end of the month of death — interest begins accruing on unpaid tax
- Twelve months from the end of the month of death — deadline to file the IHT400 account
For example, if someone dies on 15 March, inheritance tax is due by 30 September of the same year, and the IHT400 must be filed by 31 March the following year.
How much inheritance tax has to be paid up front?
This is where it gets technical. Tax on certain assets must be paid before probate. Tax on other assets can be paid in instalments.
Pay-before-probate assets
- Bank and building society accounts
- Stocks and shares (excluding controlling holdings in unquoted companies)
- National Savings investments and premium bonds
- Household goods and personal possessions
- Cars, boats, jewellery
Instalment-option assets
- Land and buildings, including the deceased’s home
- Controlling shareholdings in any company
- Unquoted shares (in certain circumstances)
- A business or interest in a business
For these assets, you can elect to pay the tax in 10 equal annual instalments. Interest is still charged, but it gives executors breathing room.
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The chicken and egg problem
Most estates have the bulk of their value tied up in property or bank accounts. The bank won’t release money without probate. The Probate Registry won’t issue probate without IHT being paid. So how do executors actually pay the tax?
There are five practical options.
5 ways to pay inheritance tax before probate
1. Direct Payment Scheme (IHT423)
This is the most common solution. The deceased’s bank or building society can pay inheritance tax directly to HMRC from the deceased’s accounts, before probate is granted. You complete form IHT423 for each institution. Most major banks participate.
2. National Savings and gilts
If the deceased held National Savings products or government gilts, these can be redeemed and the proceeds paid directly to HMRC before probate.
3. Executor’s loan
Specialist lenders offer short-term loans to executors specifically to cover inheritance tax. The loan is repaid from the estate once probate is granted. Interest rates are typically higher than HMRC’s, so this should be a last resort.
4. Beneficiaries paying out of pocket
Sometimes beneficiaries who will receive the inheritance later are willing to pay the tax up front and be reimbursed from the estate. This is common in families where one beneficiary has cash available.
5. Pay by instalments
For instalment-option assets (mainly property), you can elect to pay the tax over 10 years. The first instalment must still be paid before probate, but it’s only one tenth of the tax on those assets.
What is the inheritance tax threshold in 2026?
The current nil rate band is £325,000 per person. There’s also a residence nil rate band of £175,000 where a main home is passed to direct descendants. Married couples and civil partners can transfer any unused allowance to the survivor, meaning a couple can pass on up to £1 million tax-free in many cases. Any value above the threshold is taxed at 40%.
What happens if you can’t pay the inheritance tax?
If you genuinely cannot pay, contact HMRC as soon as possible. They will charge interest on overdue amounts but generally do not impose penalties for late payment if you can show you’ve taken reasonable steps. Penalties are reserved for failing to file or for deliberate concealment.
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📊 Get Fee EstimateHow Curtis Legal can help with inheritance tax
Inheritance tax is one of the most complex parts of probate. Getting it wrong can be expensive — overpaying, underpaying, or missing deadlines all carry real costs. Our specialist probate solicitors handle the full IHT process, including completing the IHT400, applying for the Direct Payment Scheme, and advising on instalment options.
Call us on 0800 214 216 for a free, no-obligation discussion.
Frequently Asked Questions
Do you have to pay all inheritance tax before probate?
No. Tax on assets like bank accounts and shares must be paid in full before probate, but tax on property and business assets can be paid in 10 annual instalments, with only the first instalment due before probate.
How do I pay IHT before probate?
The most common method is the Direct Payment Scheme using form IHT423, where the deceased’s bank pays HMRC directly from the deceased’s accounts. Other options include executor loans, beneficiary contributions, or redeeming National Savings products.
When does inheritance tax have to be paid?
Inheritance tax must be paid by the end of the sixth month after the month of death. After this date, HMRC charges interest on any unpaid amount.
What is the IHT423 form?
The IHT423 is the form used to ask a bank or building society to pay inheritance tax directly to HMRC from the deceased’s accounts before probate is granted. A separate IHT423 is needed for each institution.
Can I pay inheritance tax in instalments?
Yes, but only on certain assets — mainly property, business assets, and controlling shareholdings. You can pay the tax on these in 10 equal annual instalments. Interest is charged on the outstanding amount.
What if the estate doesn’t have enough cash to pay IHT?
Options include using the Direct Payment Scheme to release funds from frozen accounts, taking an executor’s loan, asking beneficiaries to contribute, or electing to pay the property portion in instalments. A solicitor can advise on the best route for your estate.
