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Finding the money to pay Inheritance Tax

You must pay some or all of the Inheritance Tax before you can get a 鈥榞rant of representation鈥� also known as 鈥榩robate鈥�. This is called 鈥榗onfirmation鈥� in Scotland.

You must pay Inheritance Tax by the end of the sixth month after the person died. For example, if the person died in January, you must pay Inheritance Tax by 31 July.

You may be able to pay the Inheritance Tax using some of the deceased鈥檚 assets such as:

• bank and building society accounts or National Savings and Investments (NS&I)
• British government stock
• share and investment portfolios
• insurance and investment bonds

Bank and building society accounts or NS&I

Pay some or all of the Inheritance Tax that is due by transferring money from the deceased鈥檚 bank, building society or NS&I accounts directly to HMRC using the Inheritance Tax Direct Payment Scheme.

British government stock

Pay the Inheritance Tax using British government stock.

Share and investment portfolios

Cash funds held within a share or investment portfolio can sometimes be released directly to HMRC to pay the tax. You should contact the stockbroker or fund manager to find out whether they can do this.

Insurance and investment bonds

Some providers of insurance and investment bonds are prepared to release funds directly to HMRC. You should contact the company to find out whether they鈥檒l do this.

When you can apply for Inheritance Tax to be postponed

If you cannot access the assets in the deceased鈥檚 estate before a grant of probate has been granted, you can ask HMRC to postpone payment of all or some of the tax and interest due until after you鈥檝e got the grant.

Once the grant has been issued, you will be expected to pay the outstanding tax as soon as possible. This is called a 鈥榞rant on credit.鈥�

You can apply to postpone payment of all or some of the tax and interest due if you鈥檙e unable to release funds from the estate.

We may place a 鈥榥otice of the Inheritance Tax charge鈥� against any land or buildings in the estate at the Land Registry. A聽notice to protect a third-party interest in a registered estate聽is an entry against the registered title of the property. It does not limit the land or building sales, but buyers may ask for the notice to be removed before finalising the purchase.

How to apply

1. If you have not already done so, send a signed and completed Inheritance Tax account聽form IHT 400聽and any supplementary pages or supporting documents to HMRC. If you鈥檙e in Northern Ireland, include Probate Summary聽form IHT421. If you鈥檙e in Scotland, include聽Confirmation form C1.

2. Write a letter to HMRC providing a statement confirming that you鈥檙e unable to release funds from the estate using the methods described in 鈥榝inding the money to pay Inheritance Tax鈥�.

3. Tell HMRC in your letter, the maximum amount that you can pay towards the Inheritance Tax. You must do this before the grant can be issued.

4. Put 鈥楪rants on credit鈥� and your Inheritance Tax reference number at the top of your letter.

5. You should tell us what steps will be taken to raise the funds to pay the tax if we agree to allow the grant on credit. This should be by the quickest option available.

Send the forms and letter to the following address:

If we agree to postpone the tax

You鈥檙e still expected to pay as much of the Inheritance Tax as you can before HMRC will support an application for grant on credit.

奥别鈥檒濒 ask you to sign an undertaking. This is a legally binding promise to pay the Inheritance Tax within an agreed timescale. 奥别鈥檒濒 consider each case on its own merits.

If the tax is to be paid following the sale of a property, there must be an accepted offer and an estimated date for exchange of contracts. We cannot issue an open-ended undertaking without a clear date of when the tax will be paid.

Interest charges

奥别鈥檒濒 聽if you do not pay all of the Inheritance Tax by the聽due date.