The six-month deadline and the probate catch-22
Inheritance tax is a debt of the estate, paid by the executors out of estate funds. It must be paid by the end of the sixth month after the month of death, and the ordering is the awkward part: you generally cannot get at the deceased's money until you have the grant of probate, but HMRC generally will not let the probate application proceed until the tax has been paid. Interest runs on unpaid tax from the first day of the seventh month, at 7.75% from 9 January 2026, and it cannot usually be avoided just because probate is slow, so executors often pay a good-faith estimate by the deadline and reconcile later. You also need an IHT payment reference number from HMRC before you can pay, and you should apply for it at least 3 weeks before you intend to make a payment.
Finding the money before the grant
The Direct Payment Scheme is the usual answer. You send form IHT423 to each bank, building society or NS&I holding the deceased's money, quoting the payment reference from your IHT400, and the institution pays HMRC directly from the deceased's own accounts. Most high-street banks take part. If there is not enough cash, executors can ask HMRC for a grant on credit, postponing part of the tax under a binding undertaking, take an executor's loan against the estate, or accept loans from beneficiaries who are repaid once assets are sold. Tax on hard-to-sell assets, including the house, a controlling shareholding or a business, can be elected onto a 10-year instalment plan on the IHT400, with the first instalment due at the six-month point and the remaining balance payable in full if the asset is sold.
When no upfront payment is needed at all
Many estates owe nothing and skip the full reporting entirely. An excepted estate, broadly one below the £325,000 nil-rate band (or £650,000 with a transferred spouse's band), one where everything above the band passes to a UK spouse or charity and the gross estate is under £3 million, or certain small non-UK estates, needs no IHT400: you simply report estimated values through the probate application and can apply for the grant straight away. Where tax is due, the full IHT400 account must be filed within 12 months of the end of the month of death, a separate and later deadline than the payment itself, and claims such as the residence nil-rate band and any reliefs go in with it. Estate administration is high-stakes and hard to unwind, so if you are an executor facing a bill, Horizon can steer the reporting and payment sequence on fixed fees agreed upfront; book a free clarity call at /book.