You cannot normally sell a deceased person’s property before probate is granted — yet HMRC requires inheritance tax to be paid before probate is issued. This is one of the most common practical problems executors face, and it has several workable solutions depending on the estate’s assets and the timeline involved.
Plain-English guide written by Simon Jenkins — covering every stage of the probate process.
The Core Problem: IHT Is Due Before You Can Sell
Inheritance tax must be paid — or at least an initial payment made — within six months of the end of the month in which the person died. HMRC will not release the deceased’s estate from IHT until this deadline is met, and HMCTS will not issue the grant of probate until the IHT position is resolved. Without probate, executors have no legal authority to transfer or sell property.
This creates a direct conflict: the main asset generating the IHT liability is the property itself, but that property cannot be sold until IHT is paid and probate obtained. Understanding your options is essential to avoiding interest charges and delays.
Option 1: Use Other Estate Assets First
The simplest solution is to use liquid assets — cash, savings, or investments held by the deceased — to pay the IHT before probate. Executors can access funds directly from the deceased’s bank accounts using the HMRC Direct Payment Scheme (IHT423), which allows banks and building societies to release funds straight to HMRC on receipt of a completed IHT423 form. The account does not need to be unfrozen or passed through probate first.
If the deceased held multiple accounts, executors can approach each institution separately. Some banks will also transfer funds from investment portfolios via this route. The IHT423 form is submitted alongside the IHT400 account, which must be filed with HMRC before the six-month deadline.
Option 2: HMRC Instalment Plan for Property
Where the estate includes qualifying property — residential property, shares giving control of a company, or certain business interests — HMRC allows the IHT attributable to that asset to be paid in ten annual instalments rather than as a lump sum. This is known as the instalment option.
To use the instalment option, you must elect for it on the IHT400 or IHT400 continuation sheet when submitting. Instalments accrue interest if not paid on time, so this is not a cost-free extension — but it does allow probate to proceed once the first instalment is paid. The remaining instalments become immediately due and payable if the property is subsequently sold during the ten-year period.
This option is particularly useful when the estate is asset-rich but cash-poor: the property can be sold post-probate and the remaining IHT instalments settled from the sale proceeds at that point.
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Option 3: Executor Bridging Finance
Some specialist lenders offer short-term bridging loans to executors specifically for paying IHT before probate. The loan is secured against the estate property and repaid from the proceeds once the property is sold post-probate. Interest rates on bridging finance are typically higher than conventional mortgages, so this route should be compared carefully against the HMRC instalment plan.
Executors have the legal power to borrow on behalf of the estate for the purpose of paying estate debts — including IHT — under section 39 of the Administration of Estates Act 1925. However, beneficiaries should be informed before taking on borrowing that will reduce the net estate value.
Can the Property Be Sold Without Probate?
In most cases, no. Registered property in England and Wales cannot be transferred or sold without production of the grant of probate (or letters of administration) to the Land Registry. A conveyancer will not proceed with a sale without this authority, and a buyer’s solicitor will refuse to complete without it.
There is one narrow exception: where property was held as beneficial joint tenants (not tenants in common), it passes automatically to the surviving owner by survivorship and does not form part of the probate estate. In that case, IHT may still be chargeable on the deceased’s share, but the property itself can be dealt with by the survivor without probate. See our guide on how long probate takes for context on the overall timeline.
Calculating the IHT Due on Property
IHT is charged at 40% on the value of the estate above the available nil-rate band. Each individual has a nil-rate band of £325,000. A surviving spouse or civil partner can inherit the deceased’s unused nil-rate band, giving a potential combined threshold of up to £650,000. Where residential property passes to direct descendants, the residence nil-rate band adds a further £175,000 per individual (up to £350,000 combined for a couple), giving a maximum combined threshold of £1,000,000 in the most favourable circumstances.
Only the value attributable to the estate above those thresholds is taxed at 40%. Getting the property valuation right is therefore critical — an inflated probate value increases the IHT bill unnecessarily, while an undervaluation risks HMRC challenging the figure and imposing penalties and interest after the grant is issued.
HMRC Scrutiny of Property Values
HMRC’s Valuation Office Agency routinely challenges property valuations in IHT400 submissions. Executors should commission a formal RICS-qualified probate valuation rather than relying on an estate agent’s opinion of value. If HMRC queries the valuation, there will be a formal negotiation process that can delay the grant and incur additional costs. A professional valuation provides a defensible position and reduces the risk of a successful challenge.
Where an executor subsequently sells the property for more than the probate valuation within a relatively short period, HMRC may revisit the IHT position. Executors should keep records of all offers received during the marketing period as evidence of the open market value at the date of death. Our inheritance tax overview covers the valuation process in more detail.
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📊 Get Fee EstimatePractical Timeline for Executors
A realistic timeline for an estate where property is the main asset and IHT is due looks broadly like this: register the death and obtain the death certificate; instruct a solicitor and a RICS valuer; gather all asset and liability values; complete the IHT400 and elect for instalments if required; arrange payment of the first instalment or full IHT via the Direct Payment Scheme; submit the probate application (PA1P if there is a will, PA1A if not); wait for HMCTS to issue the grant (online applications currently take approximately twelve weeks); instruct a conveyancer to market and sell the property; and settle any remaining IHT instalments from the sale proceeds.
Executors who try to rush this process without professional guidance frequently miss the six-month IHT deadline, triggering interest charges from HMRC. Instructing a specialist probate solicitor at the outset costs less than the interest that accumulates on a late payment.
When Professional Advice Is Essential
Property estates with IHT liabilities are among the most complex probate matters because they combine land law, tax law, and estate administration. Mistakes — including incorrect valuations, missed deadlines, or improper instalment elections — can result in HMRC penalties, personal liability for the executor, and disputes with beneficiaries.
Simon Jenkins is a specialist solicitor with extensive experience advising executors on IHT strategy, property valuations, and probate administration. Curtis Legal acts for estates across England and Wales. Call 0800 214 216 or use the contact form below for a no-obligation initial discussion.
Frequently Asked Questions
Can HMRC force a sale of the property to recover IHT?
HMRC can take enforcement action against an estate that does not pay IHT, including ultimately applying to court for a charging order against the property. In practice, this is rare because executors have the instalment option available to them. Acting promptly and communicating with HMRC avoids enforcement proceedings.
Does the six-month deadline apply even if probate has not been granted?
Yes. The six-month IHT payment deadline runs from the end of the month of death regardless of whether probate has been granted. This is why early action is essential — waiting for probate before thinking about IHT will almost certainly result in a late payment and interest charges.
What interest rate does HMRC charge on late or instalment IHT payments?
HMRC’s interest rate on unpaid IHT is set by reference to the Bank of England base rate and changes periodically. Executors should check the current rate with HMRC or their solicitor at the time of payment. Interest is charged from the six-month deadline, not from the date the IHT400 is submitted.
Can beneficiaries be asked to contribute to the IHT bill?
Where a beneficiary receives a specific gift (such as a property) from the estate, any IHT attributable to that gift falls on the beneficiary unless the will expressly states it should come from the residuary estate. Executors should review the will carefully with their solicitor before making any payments to beneficiaries, as distributing assets prematurely can create personal liability for unpaid IHT.
What if the property value falls between the date of death and the sale?
If residential property is sold for less than its probate value within four years of death, the executor can make a claim to substitute the sale price for the probate valuation, reducing the IHT paid. This is known as a loss on sale relief claim and is made on HMRC form IHT38. Professional advice is recommended before making such a claim.
Is spousal exemption available where property passes to the surviving spouse?
Yes. Transfers between spouses and civil partners are fully exempt from IHT, regardless of value. If the property passes entirely to the surviving spouse, no IHT arises on it at that point. The IHT position is instead considered when the surviving spouse later dies, at which point the transferred nil-rate band from the first death becomes available.
Do I need a solicitor to submit IHT400?
There is no legal requirement to use a solicitor, but IHT400 is a complex document running to multiple schedules. Errors or omissions can lead to HMRC enquiries, penalties, and delays to probate. Most executors dealing with a property estate and an IHT liability instruct a solicitor — the cost is a legitimate estate expense recoverable before distribution to beneficiaries.
