Longridge: 01772 783314 | Garstang: 01995 602129 | Lancaster: 01524 581306 
 
Longridge: 01772 783 314 
Garstang: 01995 602 129 
Lancaster: 01524 581 306 

How is inheritance tax paid? 

When Inheritance Tax is payable on an Estate, HM Revenue and Customs offer different options for payment. 
 
Firstly, before you can pay any inheritance tax, you will need to request an inheritance tax reference. You can do this online, here or by post using form IHT422, available on gov.uk, here
 
Once you have this number, one option for payment is the Executor of the Estate. They may be in a position to make payment of the Inheritance Tax on behalf of the Estate, which they can then claim back once the Estate funds have been collected in. For example, if there is no money available until a property is sold or investments have been sold (which could both require a Grant of Probate), they may make this payment to prevent any delays or penalties being incurred. 
 
Alternatively, if there are sufficient funds available in the deceased’s bank accounts or government stock, you can complete form IHT423 to request that the organisation makes direct payment of any inheritance tax due. 
 
If you do not know how much inheritance tax to pay, you can make payments ‘on account’. This will be deducted from the final amount of inheritance tax due, once HM Revenue and Customs has calculated this amount. 
 
If the inheritance tax is payable on things that could take some time to sell, for example, a property, you can make payment of the tax due over equal instalments. These are usually payable annually, over a 10-year period. You must select this option on the form IHT400 when you complete this. Once the asset in question has been sold, any inheritance tax must be paid off in full. 
 

Get in touch and talk to a wills and trusts expert today. 

MG Legal's expert private client solicitors are experienced in dealing with all aspects of wills, trusts, lasting powers of administration, probate matters and estate administration.  
 

Why choose MG Legal? 

With a no-nonsense, pragmatic approach, our expert team are experienced in drafting Wills, Lasting Powers of Attorney, Trusts, and Deputyship Applications, as well as in dealing with the administration of estates and obtaining Grants of Probate. 
In an increasingly impersonal market, MG Legal's friendly, expert team provide sound legal advice and all at an affordable fixed cost.  
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