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Advice with IHT please!

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With an estate that is largely tied up in shares,funds, S&S ISA etc, these are now effectively locked until probate is granted.

IHT, will be needed to be paid in order for probate to be granted and there are insufficient cash funds available to pay a direct payment from the deceased's account for the full amount that will due. I have looked at some of the specific products available to bridge the finance but the ones I like the look of (e.g Tower Street Finance) have quite high charges and additionally insist on the estate being handled "professionally" so I would also incur other significant costs. I have seen somewhere that a part payment to HMRC may be enough to get probate but nothing definitive. Can anyone offer any experiences or advice on this topic? Thanks
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  • Jeremy535897
    Jeremy535897 Posts: 10,459 Forumite
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    The scope for paying inheritance tax by instalments is very limited:
    https://www.gov.uk/paying-inheritance-tax/yearly-instalments
  • handful
    handful Posts: 546 Forumite
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    The scope for paying inheritance tax by instalments is very limited:
    https://www.gov.uk/paying-inheritance-tax/yearly-instalments

    Thanks, I have seen that. Am I right in thinking I could arrange this and make the first payment and then pay it off early once probate is granted?
  • Jeremy535897
    Jeremy535897 Posts: 10,459 Forumite
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    Yes, but I doubt the nature of the assets you describe as forming the estate will qualify for payment by instalments.
  • handful
    handful Posts: 546 Forumite
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    Yes, but I doubt the nature of the assets you describe as forming the estate will qualify for payment by instalments.

    I did wonder but it says on the HMRC website, quoting shares as an example?

    In yearly instalments

    You can pay your Inheritance Tax on things that may take time to sell in equal annual instalments over 10 years.

    You must say on Inheritance Tax Account form IHT400 if you want to pay in instalments.

    You’ll usually have to pay interest on your instalments. Use the calculator to work out the interest you’ll need to pay.

    You must pay the tax in full when you’ve sold the deceased’s assets, such as their house or shares.


  • Keep_pedalling
    Keep_pedalling Posts: 17,041 Forumite
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    The type of share you can choose to pay by instalments is very limited and won’t apply to most equities people hold.

    On what type of shares can I pay the tax by instalments?

    You may pay Inheritance Tax by instalments on shares or securities in a company if:
    • theygavethedeceasedcontrolofthecompanyatthetimeof
    the transfer
    • theyareunlistedandyoucanshowthattheInheritanceTaxontheir
    value could not be paid in one sum without undue hardship, or at least 20% of the tax for which the same person is liable, in the same capacity, is on assets (including the shares in question) that qualify for payment by instalments
    • theyareunlistedsharesandtheirvalueismorethan£20,000andthe shares represent at least 10% of the nominal value of the company’s shares
    These shares are shown in boxes 66 and 67 of the form IHT400, not boxes 62, 63 or 65.

    It must be quite unusual for an estate in IHT territory to not contain a house or reasonable amount of cash.
  • HappyHarry
    HappyHarry Posts: 1,601 Forumite
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    edited 18 October 2022 at 4:02PM
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    handful said:
    With an estate that is largely tied up in shares,funds, S&S ISA etc, these are now effectively locked until probate is granted.

    IHT, will be needed to be paid in order for probate to be granted and there are insufficient cash funds available to pay a direct payment from the deceased's account for the full amount that will due. I have looked at some of the specific products available to bridge the finance but the ones I like the look of (e.g Tower Street Finance) have quite high charges and additionally insist on the estate being handled "professionally" so I would also incur other significant costs. I have seen somewhere that a part payment to HMRC may be enough to get probate but nothing definitive. Can anyone offer any experiences or advice on this topic? Thanks
    Have you asked the S&S ISA / fund platform if they can release funds to pay an IHT bill? Many do nowadays. 

    This didn’t used to be the case but is far more common now.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
  • handful
    handful Posts: 546 Forumite
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    The type of share you can choose to pay by instalments is very limited and won’t apply to most equities people hold.

    On what type of shares can I pay the tax by instalments?

    You may pay Inheritance Tax by instalments on shares or securities in a company if:
    • theygavethedeceasedcontrolofthecompanyatthetimeof
    the transfer
    • theyareunlistedandyoucanshowthattheInheritanceTaxontheir
    value could not be paid in one sum without undue hardship, or at least 20% of the tax for which the same person is liable, in the same capacity, is on assets (including the shares in question) that qualify for payment by instalments
    • theyareunlistedsharesandtheirvalueismorethan£20,000andthe shares represent at least 10% of the nominal value of the company’s shares
    These shares are shown in boxes 66 and 67 of the form IHT400, not boxes 62, 63 or 65.

    It must be quite unusual for an estate in IHT territory to not contain a house or reasonable amount of cash.
    Thanks for commenting. There is quite a bit of cash but would cover less than half of the IHT that will be due. I might call HMRC when I get more details of where the money is invested. If installments aren't an option then I guess either a specific IHT loan secured against the estate or a bridging loan secured to my property will become the only options. Both very expensive!

  • handful
    handful Posts: 546 Forumite
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    handful said:
    With an estate that is largely tied up in shares,funds, S&S ISA etc, these are now effectively locked until probate is granted.

    IHT, will be needed to be paid in order for probate to be granted and there are insufficient cash funds available to pay a direct payment from the deceased's account for the full amount that will due. I have looked at some of the specific products available to bridge the finance but the ones I like the look of (e.g Tower Street Finance) have quite high charges and additionally insist on the estate being handled "professionally" so I would also incur other significant costs. I have seen somewhere that a part payment to HMRC may be enough to get probate but nothing definitive. Can anyone offer any experiences or advice on this topic? Thanks
    Have you asked the S&S ISA / fund platform if they can release funds to pay an IHT bill? Many do nowadays. 

    This didn’t used to be the case but is far more common now.
    The company looking after the investments will not do anything with the investments until we have probate. They are still charging for their advice though! I can't believe how many snouts there are in the trough when someone dies.

  • HappyHarry
    HappyHarry Posts: 1,601 Forumite
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    edited 18 October 2022 at 4:56PM
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    handful said:
    handful said:
    With an estate that is largely tied up in shares,funds, S&S ISA etc, these are now effectively locked until probate is granted.

    IHT, will be needed to be paid in order for probate to be granted and there are insufficient cash funds available to pay a direct payment from the deceased's account for the full amount that will due. I have looked at some of the specific products available to bridge the finance but the ones I like the look of (e.g Tower Street Finance) have quite high charges and additionally insist on the estate being handled "professionally" so I would also incur other significant costs. I have seen somewhere that a part payment to HMRC may be enough to get probate but nothing definitive. Can anyone offer any experiences or advice on this topic? Thanks
    Have you asked the S&S ISA / fund platform if they can release funds to pay an IHT bill? Many do nowadays. 

    This didn’t used to be the case but is far more common now.
    The company looking after the investments will not do anything with the investments until we have probate. They are still charging for their advice though! I can't believe how many snouts there are in the trough when someone dies.

    Who are this company advising? They can only charge the executors for advice if the executors have agreed to pay for ongoing advice. The contract with the deceased has ended.

    Which company is providing advice, and which platform are the funds held on?
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
  • handful
    handful Posts: 546 Forumite
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    handful said:
    handful said:
    With an estate that is largely tied up in shares,funds, S&S ISA etc, these are now effectively locked until probate is granted.

    IHT, will be needed to be paid in order for probate to be granted and there are insufficient cash funds available to pay a direct payment from the deceased's account for the full amount that will due. I have looked at some of the specific products available to bridge the finance but the ones I like the look of (e.g Tower Street Finance) have quite high charges and additionally insist on the estate being handled "professionally" so I would also incur other significant costs. I have seen somewhere that a part payment to HMRC may be enough to get probate but nothing definitive. Can anyone offer any experiences or advice on this topic? Thanks
    Have you asked the S&S ISA / fund platform if they can release funds to pay an IHT bill? Many do nowadays. 

    This didn’t used to be the case but is far more common now.
    The company looking after the investments will not do anything with the investments until we have probate. They are still charging for their advice though! I can't believe how many snouts there are in the trough when someone dies.

    Who are this company advising? They can only charge the executors for advice if the executors have agreed to pay for ongoing advice. The contract with the deceased has ended.

    Which company is providing advice, and which platform are the funds held on?
    I'm a little bit reluctant to name and shame if this is incorrect at the moment but this is an extract from the deceased's paperwork. I am waiting to receive details of where the investments are held currently but I know just under half is in a S&S ISA and the rest in fund of some sort.

    "Upon notification of your death we will continue to deduct all our normal charges and all pending and scheduled instructions will be cancelled. The value of your account may form part of your estate for inheritance tax purposes and once a ‘grant of representation’ has been issued we will accept instructions from your legal representatives. Your account will remain invested in assets until we receive instructions to sell them."



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