Grant of probate - and paying inheritance tax?

hibiscus93

I am so overwhelmed.

I have applied for grant of probate, however have not yet send in the inheritance tax forms as I am struggling to complete one section.

However, I am confused, as in order to be granted probate, I believe I have to have paid inheritance tax? But I have no money to pay this, until grant of probate is issued? 

My mother sold a property 5 days before she died, due to this they need grant of probate to go through for them to be able to complete the sale. I need the sale to go through to pay for the inheritance tax - how does this work?

I assume if I fill in the correct form, her banks can release their funds to pay towards the inheritance tax, but this wouldn't cover it fully.

1561992

hibiscus93 said:

I am so overwhelmed.

I have applied for grant of probate, however have not yet send in the inheritance tax forms as I am struggling to complete one section.

However, I am confused, as in order to be granted probate, I believe I have to have paid inheritance tax? But I have no money to pay this, until grant of probate is issued? 

My mother sold a property 5 days before she died, due to this they need grant of probate to go through for them to be able to complete the sale. I need the sale to go through to pay for the inheritance tax - how does this work?

I assume if I fill in the correct form, her banks can release their funds to pay towards the inheritance tax, but this wouldn't cover it fully.

We’re currently going through the Probate situation with my Uncle’s estate -HMRC insisted on us paying approx 38% of the final value IHT before it was released to the Probate Registry (so I would assume you wouldn’t have to worry about paying the whole total in full) and you are correct, this amount can be paid from the deceased bank account direct to HMRC using a “IHT423” form. I handed the form directly into any HSBC branch (since my Uncle held an account with this Bank) and they made payment within 1 week. 

hibiscus93

Okay thank you! I will do just that.

Keep_pedalling

Are you sure you have IHT to pay? Assuming the house was worth at least ££175k then her estate  needs to exceed £500k before IHT is due, and if she was a widow it could be double that.

Where IHT is due, the IHT return should be completed first.

hibiscus93

Yes I am sure, and it is a huge inheritance bill - and she was not a widow.

I will get the forms sent in asap

Keep_pedalling

hibiscus93 said:

Yes I am sure, and it is a huge inheritance bill - and she was not a widow.

I will get the forms sent in asap

Thanks,, had to ask as a lot of people are not aware of things like the transferable NRB.

As you can’t exchange contracts or complete before you have probate you may have to opt to pay IHT by instalments which will mean you only have to pay 10% for the first instalment The rest will be subject to interest so best to pay as much as you can.

Money tied up in banks can be used to meet an IHT bill before you actually have probate buy using the direct payment scheme. You will need form IHT 423 for this

https://www.gov.uk/government/publications/inheritance-tax-direct-payment-scheme-bank-or-building-society-account-iht423