Inheritance Tax and Probate UK 2026: IHT400 Return, 6-Month Payment Deadline, Paying IHT Before Probate, HMRC Direct Payment Scheme, and Executor Liability
IHT must be paid before probate can be granted — but probate is needed to access the estate's accounts to pay it. The HMRC Direct Payment Scheme is the solution. And executors who distribute before paying are personally liable for the shortfall.
6-Month IHT Deadline — s226 IHTA 1984
IHT is due 6 months from the end of the month of death. Interest (s233 IHTA) accrues on unpaid IHT from the due date. Pay via the HMRC Direct Payment Scheme (IHT423) — banks pay HMRC directly from the deceased's accounts without needing probate. HMRC then issues the IHT421 receipt needed to apply for probate.
IHT and Probate: Timeline
Death
Death certificate obtained (usually within 5 working days from registrar). Locate the will — or confirm intestacy. Identify executors (under the will) or potential administrators (under intestacy). Funeral arrangements.
No IHT action yet. Executor's authority derives from the will — it exists from death, before probate. The executor can VALUE the estate but cannot SELL or TRANSFER assets without a grant of probate (except in specific circumstances).
Estate valuation
Value all assets at date-of-death market value: property (RICS 'red book' valuation or District Valuer if HMRC requests); investments (Stock Exchange closing prices on date of death — s179 IHTA); bank accounts (balance at date of death); life insurance (policy pay-out value — if not in trust); business interests (specialist accountancy valuation). Collect all outstanding debts.
IHT starting point: gross estate value. Deduct: allowable debts (mortgage, trade debts, funeral expenses — s172 IHTA max reasonable amount for funeral + headstone). Calculate available exemptions (s18 IHTA spousal; s23 IHTA charitable; BPR/APR). Identify: NRB; RNRB (s8H — QRI to direct descendants); tNRB (IHT402 if applicable); tRNRB (IHT435 if applicable).
IHT400 preparation
Complete the IHT400 with all relevant schedules (see schedule list). This requires extensive information: all bank accounts (IHT406); all property (IHT405 with valuations); all gifts made in the 7yr before death (IHT403); joint assets (IHT404); pensions (IHT409); life insurance (IHT410); BPR (IHT413); trusts (IHT418); foreign assets (IHT417). The IHT400 can be submitted online or by post.
IHT due date: 6 months from the end of the month of death (s226 IHTA). Example: death 14 June 2026 → IHT due 31 December 2026. Interest accrues at HMRC rate from the due date (s233 IHTA) on unpaid IHT. Important: IHT on PROPERTY (and certain other assets) can be paid by INSTALMENT (s227 IHTA — 10 annual instalments, interest-bearing) — but IHT on cash/investments must be paid within the 6-month deadline.
Pay IHT — HMRC Direct Payment Scheme (DPS)
Complete IHT423 for each bank/institution where the deceased held funds. The IHT423 authorises the institution to pay HMRC directly from the deceased's accounts — WITHOUT needing a grant of probate first. Most UK banks and NS&I participate. The institution then pays HMRC directly. After IHT is received, HMRC issues a stamped IHT421 (or digital equivalent).
The IHT421 is the payment receipt. It is needed alongside the IHT400 when applying for the grant of probate. Without the IHT421 (or an instalment arrangement confirmation): probate cannot be obtained. For PROPERTY (where instalments are used): a first instalment must be paid before probate is granted (or an arrangement confirmed with HMRC).
Apply for grant of probate / letters of administration
In England and Wales: application online at www.gov.uk/probate or by post to the Probate Registry. Supporting documents: original will; death certificate; IHT421 (or HMRC confirmation that no IHT400 is required for excepted estates); statement of truth (executors confirm accuracy). Grant of probate issued by the Probate Registry — typically 4-8 weeks after application.
The grant of probate ('the grant') gives the executor legal authority to: access bank accounts; sell/transfer property; call in investments; distribute assets. Without the grant: third parties (banks, land registry, HMRC) will not deal with the executor. Excepted estates (below £3m threshold from 1 January 2022): no IHT400 required; use Form IHT205 (England/Wales) or online equivalent instead.
Estate administration and distribution
With the grant: access accounts; sell/transfer property; distribute legacies; deal with trusts (if any); obtain income tax clearance for the administration period; settle debts; prepare estate accounts. Beneficiaries receive their share. Issue receipts.
HMRC review window: HMRC has 12 months from the IHT400 submission date to open a formal enquiry (IHTM00200 series). HMRC may request: independent property valuations (District Valuer); evidence of gifts (bank statements, IHT403 supporting docs); BPR qualification evidence; trust accounts. Executor liability: s199 IHTA — do NOT distribute the estate before IHT is settled (and ideally before obtaining HMRC clearance — s239 IHTA/IHT30). Clearance (IHT30): apply after submitting IHT400 and paying IHT; HMRC confirms IHT settled; executor released from personal liability for the assessed IHT.
IHT and probate UK 2026. s226 IHTA 1984: IHT due 6 months from the end of month of death. s233 IHTA: interest on late IHT at HMRC statutory rate. DPS: HMRC Direct Payment Scheme; IHT423 form; participating institutions: most UK banks, building societies, NS&I; institution pays HMRC directly without probate; HMRC issues IHT421 (payment receipt/probate application document). IHT400: main return; HMRC Trusts and Estates, BX9 1HT. 40+ schedules (IHT401-IHT436): IHT402 (tNRB — must claim, NOT automatic; evidence of first spouse's estate required); IHT403 (gifts in last 7yr — PETs; normal income s21; annual exemptions s19; small gifts s20); IHT404 (jointly held assets — severance of joint tenancy); IHT405 (houses, land, buildings — HMRC IHTM09000); IHT406 (bank/building society accounts); IHT407 (household goods — estimated value acceptable for lower-value estates); IHT408 (business interests); IHT409 (pensions — currently outside IHT for DC; from April 2027 DC pensions in estate — FA 2024); IHT410 (life insurance and annuities); IHT411 (listed investments — Stock Exchange prices at date of death — 'quarter-up' rule: quoted mid-price + quarter of difference between high and low prices — s179 IHTA); IHT412 (unlisted shares); IHT413 (BPR — ss103-114 IHTA); IHT415 (debts — allowable deductions); IHT416 (money owed to the estate); IHT417 (foreign assets); IHT418 (trusts); IHT419 (debts — further information); IHT420 (National Heritage); IHT421 (probate certificate); IHT430 (interest in another person's estate); IHT435 (RNRB — must claim, NOT automatic); IHT436 (downsizing addition). HMRC review: 12 months from IHT400 submission to open formal enquiry; HMRC DV (District Valuer) for property valuations; HMRC may accept or challenge valuations. s199 IHTA: executor personal liability; applies before clearance. s239 IHTA: clearance certificate (IHT30); apply after IHT settled; HMRC confirms no further IHT claims (subject to fraud/non-disclosure); protects executor from further personal liability. Instalment option: s227 IHTA — 10 annual instalments for: land/buildings; businesses/interests in businesses; controlling shareholding in unlisted company (s228 IHTA); heritage property. Acceleration: s227(3) — full balance due if instalment property sold. Interest: s234 IHTA on instalment amounts (payable with each instalment). Excepted estates: Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021 (SI 2021/1167); from 1 January 2022; IHT205 (England/Wales) or online Form for low-value excepted estates; C5 (Scotland); NI separate. Probate Registry: His Majesty's Courts & Tribunals Service; apply online at gov.uk/probate; supporting docs: original will, death certificate, IHT421 or excepted estate form, statement of truth. Letters of administration: for intestacy (no will) or where executor cannot act. Solemn form probate: contentious estates — probate litigation.
Frequently Asked Questions
Do you have to pay inheritance tax before probate?
Yes — this is the classic IHT/probate chicken-and-egg problem. IHT is due 6 months from the end of the month of death (s226 IHTA). But the grant of probate (which gives the executor access to the deceased's accounts) cannot be obtained until IHT is paid (or arranged). Solution: the HMRC Direct Payment Scheme (DPS). Executors complete Form IHT423 for each participating bank, building society, or NS&I institution. The institution pays HMRC directly from the deceased's accounts — without needing a grant of probate. HMRC then issues an IHT421 (payment receipt). The IHT421 is submitted with the probate application to the Probate Registry. Most UK high street banks participate in the DPS. Assets NOT covered by DPS (e.g., investment portfolios held with brokers, some private banks): executors may need to borrow funds to pay IHT before probate.
What is the IHT400 form and when do you need one?
The IHT400 is the main HMRC inheritance tax return, required for estates that are NOT 'excepted estates'. From 1 January 2022: excepted estates are those below £3m with qualifying features (no IHT due; or surviving spouse/CP estate; or qualifying low-value estate). Above the excepted estate threshold OR where IHT is payable: IHT400 required. The IHT400 has 40+ supplementary schedules covering: IHT402 (tNRB — must claim, not automatic); IHT403 (gifts in last 7yr); IHT404 (jointly held assets); IHT405 (property); IHT406 (bank accounts); IHT409 (pensions); IHT410 (life insurance); IHT413 (BPR); IHT417 (foreign assets); IHT418 (trusts). The IHT400 must be submitted to HMRC Trusts and Estates; HMRC has 12 months from receipt to open a formal enquiry.
When is inheritance tax due after someone dies?
IHT is due 6 months from the end of the month of death (s226 IHTA 1984). Example: death 14 June 2026 → IHT due 31 December 2026. Interest (at the HMRC late payment rate — s233 IHTA) accrues from the due date on any unpaid balance. Exception — instalment option (s227 IHTA): IHT on land, buildings, controlling interests in unlisted companies, and certain other assets can be paid in 10 equal annual instalments (first instalment must be paid before probate). The instalment option is interest-bearing for cash assets (the interest accrues) but is interest-free for qualifying heritage property. IHT on cash, investments, and most other assets must be paid in full within the 6-month deadline.
Are executors personally liable for inheritance tax?
Yes — executors are personally liable for IHT under s199 IHTA 1984. An executor who distributes the estate (pays beneficiaries, transfers assets) before the IHT is fully settled can be made personally liable by HMRC for any IHT that remains unpaid. This is a strict liability — good faith is not a defence. How to protect yourself as an executor: (1) Do not distribute the estate until IHT is paid and confirmed by HMRC. (2) Obtain HMRC clearance before final distribution: apply for the s239 IHTA clearance certificate (Form IHT30). HMRC will confirm in writing that all IHT has been settled and will not pursue further claims. (3) Once clearance is obtained: the executor is released from personal liability for the assessed IHT (subject to future HMRC enquiries — clearance does not cover fraud or material non-disclosure). Practical: always wait for HMRC clearance before making the final distribution to beneficiaries.
What are excepted estates for inheritance tax?
Excepted estates (from 1 January 2022 — Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021): estates that do NOT require a full IHT400 return. The main categories: (1) Low-value excepted estates: gross estate below £3m AND the estate qualifies as excepted (no IHT payable after applying all exemptions; no trusts; no foreign domicile). (2) Exempt excepted estates: estate passes entirely to the surviving spouse/CP or charity (s18 and s23 IHTA exemptions — no IHT due). (3) Excepted low-value estates in Northern Ireland and Scotland: separate thresholds and forms. For excepted estates: use Form IHT205 (England/Wales), online IHT return, or C5 (Scotland). No full IHT400 required. But: tNRB (IHT402) must still be claimed on the second death even for excepted estates if additional NRB is being used. NOTE: if HMRC later discovers that the estate should NOT have been treated as excepted (e.g., the estate value was understated), penalties can apply.
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