Paying Inheritance Tax

Lucyh_3

Hi all

Has anyone ever had to organise a Bank Loan/Executor Loan/Probate Loan in order to pay an Inheritance Tax bill before Probate is Granted?

If so, which bank/financial institution did this please? I'm having real trouble finding a bank which knows about this or does this, it's seems almost impossible, but it can't be.

Any help gratefully received please.

Thanks

Lucy

fengirl_2

I was offered a loan by NatWest when I was winding up my aunt's estate. I only went to them as she banked with them and in my innocence, I thought it would be easier!
Having ignored the local bank manager's patronising comments about my ability to deal with the estate, it all had to go through their HO. They eventually granted the loan at some ridiculous interest rate. Luckily, by then I had found out that National Savings will pay IHT direct to HMRC if the deceased had NSI investments (which luckily my aunt did).
I have seen posts elsewhere which suggest that some banks or building societies may also agree to settle IHT where the deceased had an account with them, so it might be worth asking around.

Lucyh_3

Thanks Fengirl. Unfortunately it is for a large amount but the majority of the estate is tied up in shares, so as soon as I pay the Inheritance Tax, then Probate can be Granted and I can then sell some shares and pay back the loan. Unfortunately it's finding a bank who will do this. Mum's bank said they don't do it anymore and she's not got enough cash in her bank account to cover it all.

I've been to a few banks, but the thought of traipsing round the rest to be told the same thing is too depressing (especially in the circumstances).

Very frustrating.

L

Johnhowell

Lucy,

I thought I had heard that the Probate Office has a facility to provide a bridging loan itself.

Give them a call and ask.

I put bridging loan in to Lycos and lots of companies came up. The rates are going to be higher than for usual loans because of the short nature of the term.

Good luck,
John

Lucyh_3

Thanks John, I am trying to speak to someone there who is not a trainee as it is a complex case, so I will add that to my list of evergrowing questions as well.

Thanks for all the advice.

Lucy

Mikeyorks

Most Banks will draw a cheque to HMRC / funeral directors etc .... on presentation of an invoice / statement and debit the deceased' account. But that can obviously only happen when there is enough liquidity. If the majority of the Estate is in assets that can only be liquidated after Probate .. then you get the classical Catch 22?

Probate Office won't grant loans .. they're just part of the Court service and the IHT is nothing to do with them. But it may be a frequent question .. so they may have guidance on potential sources.

You've asked for loans? Would you get the same response for an overdraft - which is the more usual method?

Do you have to pay the full IHT to get Probate? Might the estate fall into an instalment arrangement - with liquid assets covering at least the first instalment? As HMRC interest rates (on the balance) are more reasonable than overdraft rates?

http://www.hmrc.gov.uk/CTO/customerguide/page12-6.htm

oldwiring

And some BSocs and other deposit takers like C&G wil do as Mikeyorks says. I did it that way with MiL's estate.