How long have I got to pay Inheritance Tax?

Time and tide wait for no man – just like the taxman. You may have thought that inheritance tax is paid once you have been granted probate, ie, the legal authority to dispose of a dead person’s money and possessions.

But, in fact, the reverse is true. Probate will not be granted until a receipt for the tax has been supplied by Her Majesty’s Revenue and Customs (HMRC).

Inheritance tax must be paid within half a year of the end of the month of the death. And interest will be charged if this deadline (no pun intended) is not met. That, of course, can present a problem. How can you pay HMRC if you are not allowed to get your hands on the money?

First, banks and building societies may lend money to personal representatives. National Savings will usually transfer funds directly to HMRC. Some financial institutions will release cash before the grant is received. And executors are allowed to sell assets before applying for probate.

It is also possible to pay inheritance tax in instalments over ten years on assets like houses, businesses, farmland and woodland.

For expert help with the probate process, contact Heritage Will Writing on 02380 879243.