Paying the Inheritance Tax liability

The personal representatives are required to pay the Inheritance Tax liability before the application for representation can be made. This can constitute a problem as the deceased’s assets are frozen from the date of death.

When is it paid?

The due date for Inheritance Tax is six months from the end of the month in which the death took place. Interest will be charged after the six month period on any outstanding liability.

The tax must usually be paid before the grant of representation is issued. If an estate is complicated then it may be possible to obtain the grant of representation before the full liability has been paid.

In such a case the issue of the grant does not mean that the final Inheritance Tax liability has been agreed and the balance of the Inheritance Tax bill will, in any event, need to be paid within the six month limit.

Deferring payment

Inheritance Tax on some assets, including land and buildings (including the deceased’s house), can be deferred and paid in equal installments over ten years. Interest will be charged in most cases.

Payment methods

HM Revenue & Customs will accept the following methods of payment:

1. A cheque, electronic bank transfer or giro cheque (from a joint account held with the deceased);

2. Payment by the next of kin or the personal representatives who will be reimbursed by the estate after obtaining probate;

3. From the deceased’s bank or building society account using the inheritance Tax direct payment scheme. (You will need to check that the deceased’s bank or building society is a member of this scheme);

4. Payment using British Government stock held in the deceased’s name; or

5. Payment using National Savings investments held in the deceased’s name.

Please note

The information which we provide through Lasting Post is in outline for information or educational purposes only. The information is not a substitute for the professional judgment of a solicitor, accountant or other professional adviser. We cannot guarantee that information provided by Lasting Post will meet your individual needs, as this will very much depend on your individual circumstances. You should therefore use the information only as a starting point for your enquiries.