Is There Anything You Can Do if You’re Struggling to Pay an Inheritance Tax Bill? March 2026

Though the current inheritance tax thresholds mean that only around 6% of UK estates will face an inheritance tax bill, the process can be difficult to manage for those estates that do. 

The balance of any inheritance tax that is payable on an estate will come due at the end of the sixth month after the individual died. For example, if someone dies in January, any tax bill on their estate would be due by 31st July. Any balance that has not been paid off after this date will start accruing interest.

In most situations, it will be necessary to make a payment towards the balance of any inheritance tax bill that is due before a Grant of Probate can be issued. This can pose a problem, because personal representatives generally need to have a Grant of Probate in order to be allowed access to bank and savings accounts belonging to the estate. 

In practice, this means that personal representatives often aren’t able to access funds belonging to the estate until the tax bill has been paid, but they need to have access to those funds in order to pay the bill. 

This Catch-22 situation can also be difficult in the case of estates that are asset rich but cash poor. In these situations, the personal representatives often need to sell property in order to meet the cost of any inheritance tax bill. Not only will the tax bill often come due in less time than it takes to prepare a property for sale, find a buyer and complete the conveyancing process, but it’s also the case the property cannot be sold on behalf of an estate without a Grant of Probate already in place. 

What can be done in these situations?

Use HMRC’s Direct Payment Scheme

If the bank or building society the person who has died held accounts with is part of the government’s direct payment scheme, you may be able to request that they pay money towards the inheritance tax bill directly to HMRC. It’s possible to apply to use the scheme before being granted a Grant of Probate. You can read about how to request this here. 

Personal representatives can use their own funds then claim the money back later

If the personal representatives are able to come up with at least enough money to pay a portion of the inheritance tax bill, this can often be the most straightforward option. 

The personal representatives can pay some money towards the tax bill themselves as soon as it comes due, then they can repay themselves from the estate once they have access to the accounts and/or have collected in the proceeds of any property sales. 

If personal representatives do this, they should ensure the money for the tax bill is repaid at the same time as the rest of the estate’s debts are settled. They will also need to ensure they have provided clear documentation for what they have done in case there are any questions from beneficiaries later down the line. 

Personal representatives can take out a bank loan

If the personal representatives are not in a position to temporarily cover the cost of a portion of the inheritance tax bill themselves, they may need to look into applying for a bank loan. In these situations, the personal representatives would need to apply for a loan on their own behalf, not on behalf of the estate.

Personal representatives can apply to pay in instalments

In certain situations, it may be possible to apply to pay off the balance of an inheritance tax bill in yearly instalments. There are multiple reasons why you might wish to do this. The two most common are:

1. Property or other assets (such as shares or a business) need to be sold in order for the inheritance tax bill to be paid, and it will take time for those assets to be sold.
2. Property or other assets would need to be sold in order for the inheritance tax bill to be paid, but the beneficiaries do not wish to sell them.

In both these situations, it will often be possible to agree with HMRC for the total value of the tax bill to be paid in 10 annual instalments. 

The full balance can be paid whenever the personal representatives choose. For instance, if it took two years to sell a house and the representatives had therefore paid the first two 10% instalments during this time, they could then pay off the full balance as soon as the sale of the house completed. 

Though there can be clear benefits to paying an inheritance tax bill in instalments – especially if it will enable beneficiaries to hold on to a beloved home or keep a business in the family – there is a downside. 

If you agree with HMRC to pay an inheritance tax bill in instalments, it will be subject to interest over the full payment term (which can be as long as ten years). Interest will be payable both on the full outstanding balance, and on any individual late payments.

You can find out more about paying an inheritance tax bill in instalments and the circumstances where you may be able to do this here. 

Getting help managing inheritance tax

If you’re in the process of exploring whether or not inheritance tax might be due on your estate in the future, you might like to read some of our resources on the subject. You can find out more about current inheritance tax thresholds and reliefs in our recent blog post, or you could take a look at our detailed help guide on how to reduce your inheritance tax.  

It’s important to emphasise that personal representatives can be held personally and financially liable for any mistakes that are made with inheritance tax payments. This means that it really is vital to ensure that any payments are managed correctly. Seeking professional advice can help to avoid this, so please do get in touch if you’re at all unsure of how to handle the inheritance tax process. 

FAQs

When do inheritance tax bills need to be paid?

If there is any inheritance tax due to be paid on an estate, it will come due at the end of the sixth month after the individual’s death. For example, if someone died on the 12th January, any inheritance tax bill that is due on their estate would be due by 31st July. 

What is HMRC’s direct payment scheme?

Many banks and building societies are part of HMRC’s direct payment scheme. This allows the personal representatives of an estate to request that funds from a bank account are transferred directly to HMRC to cover the cost of an inheritance tax bill. 

Do executors have to pay the inheritance tax bill themselves?

Executors and other personal representatives are not responsible for covering the cost of an inheritance tax bill themselves. However, in some situations it may be necessary for personal representatives to pay at least a portion of an inheritance tax bill and then reimburse themselves from estate funds once it is possible to do so.

Can you pay an inheritance tax bill in instalments?

It is sometimes possible to agree with HMRC for an inheritance tax bill to be paid in instalments. In these situations, the balance will typically need to be paid in ten annual instalments. Interest will apply on the outstanding balance during this time.