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Paying IHT Before Probate: The Direct Payment Scheme Explained
By Farra Editorial Team•9 min read•Last updated: 15 October 2025
How do I pay IHT before probate is granted?
1IHT must be paid before probate is granted — but probate is needed to access most estate funds. The Direct Payment Scheme (DPS) breaks this deadlock.
2The DPS allows HMRC to collect IHT directly from the deceased's bank accounts — the executor completes form IHT423 and sends it to each participating bank.
3Most UK high street banks participate in the DPS, including Barclays, HSBC, Lloyds, NatWest, Halifax, and Santander.
4Each IHT423 can only be used for one bank — you need a separate form for each institution where funds will be drawn from.
5If IHT is not paid within 6 months of death, HMRC charges interest — so acting promptly is important.
One of the most frustrating aspects of estate administration is the circular problem: you must pay inheritance tax before probate is granted, but you cannot access estate assets to fund the payment until probate is granted. The Direct Payment Scheme (DPS) is the solution designed specifically for this situation. This guide explains how it works and how to use it. For an overview of the IHT process, see our IHT400 form guide.
The Chicken-and-Egg Problem
The legal position is clear but frustrating:
HMRC will not issue an IHT421 clearance certificate (needed for probate) until IHT is paid or a payment arrangement is in place.
The Probate Registry will not issue a Grant of Probate until the IHT position is confirmed.
Banks and other institutions will not release estate funds to the executor without a Grant of Probate.
The Direct Payment Scheme breaks this loop by allowing the bank to pay HMRC directly from the deceased's account, without requiring probate first.
How the Direct Payment Scheme Works
Obtain IHT reference number: Apply to HMRC for an IHT reference number before completing IHT400. You will need this on the payment form.
Complete IHT400: File your Inheritance Tax account with HMRC. Calculate the IHT due. See our IHT400 form guide.
Complete form IHT423: This is the Direct Payment Scheme form. Fill in the details of the bank account from which payment is to be drawn. You need a separate IHT423 for each bank account you wish to draw from.
Send IHT423 to the bank (not HMRC):Send the completed IHT423 directly to the deceased's bank or building society, not to HMRC. Include a certified copy of the death certificate. The bank will then transfer the funds directly to HMRC.
HMRC confirms payment: Once HMRC receives the payment, they will issue the IHT421 confirmation. This can then be included with your probate application.
Apply for probate: With the IHT421 received, you can now complete and submit your probate application (PA1P or PA1A). See our guide to PA1P vs PA1A probate application forms.
Which Banks Participate in the DPS?
The following banks and building societies participate in the Direct Payment Scheme (this list may change — always confirm with the individual institution):
Barclays Bank
HSBC
Lloyds Banking Group (including Halifax and Bank of Scotland)
NatWest (including Royal Bank of Scotland)
Santander
Virgin Money (formerly Clydesdale Bank)
Nationwide Building Society
Yorkshire Building Society
Skipton Building Society
Some smaller banks and building societies do not participate — if the deceased banked with a non-participating institution, alternative payment methods include personal cheque, bank transfer from your own funds (which you recoup once probate is granted), or borrowing from another beneficiary.
Not sure of your inheritance tax position?
IHT errors are the most common reason applications are rejected. In 2 minutes, we'll calculate your position and tell you which forms to file.
IHT on certain assets — most importantly, land and property — can be paid by 10 annual instalments rather than in full upfront. This can significantly ease the cash flow burden if the estate lacks liquid assets.
Key points on property instalments:
The first instalment is due 6 months after the date of death (same deadline as the full IHT payment).
Interest is charged on outstanding instalments from the 6-month deadline — so the total cost increases with each year.
If the property is sold, all remaining instalments become due immediately.
Instalment option also applies to business and agricultural property in some circumstances.
If the estate genuinely cannot raise the funds to pay IHT (for example, all assets are illiquid, such as a property with no mortgage and no savings), you have several options:
Executor loan: The executor (or a beneficiary) personally lends the estate the funds to pay IHT, repaid from estate assets once probate is granted.
Bridging loan: Some lenders offer probate bridging loans specifically for this situation — the loan is secured against the estate and repaid once assets are realised.
Instalment option: Use instalments for property IHT (see above) and pay other IHT from any available liquid assets.