Paying IHT Before Probate: The Direct Payment Scheme Explained

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.
3The scheme is not limited to banks. IHT423 also covers building societies, NS&I, brokers and investment management firms. GOV.UK does not publish a list of participants and warns that some institutions may not be part of the scheme — check with each one.
4Each IHT423 can only be used for one bank — you need a separate form for each institution where funds will be drawn from.
5The tax is due by the end of the sixth month AFTER the month of death — GOV.UK example: died in January, pay by 31 July. Interest runs from that date. The IHT400 itself is not due until 12 months after the death.

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 release what you need for the probate application until the tax is paid or a payment arrangement is in place. In England and Wales that is a unique code HMRC sends you so you can apply for probate online — the old IHT421 ‘probate summary’ was withdrawn for England and Wales on 18 January 2024 and now applies only in Northern Ireland. In Scotland, HMRC stamps and returns form C1 so you can apply for confirmation.
The probate service will not issue a grant of representation (confirmation, in Scotland) until the inheritance tax position is confirmed.
Banks and other institutions will not release estate funds to the executor without that grant.

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

Get yourself recognised by the institution: ask the bank, building society or investment provider to make you a personal representative. Each one does this differently, and GOV.UK warns some may not be part of the scheme at all.
Obtain the inheritance tax payment reference number: apply to HMRC at least three weeks before you want to make the payment. You will need it on IHT423.
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 institution, not HMRC: the form says so in terms — “Send the form to the bank, building society, NS&I, brokerage company and investment manager firms, and not to HM Revenue and Customs”. A separate form for each account. In signing it you confirm you have applied for a grant of representation or confirmation.
Send the IHT400 and schedules to HMRC: in Northern Ireland include probate summary IHT421; in Scotland include confirmation form C1.
HMRC confirms payment: in England and Wales HMRC sends you a unique code so you can apply for probate online. In Northern Ireland and Scotland HMRC stamps and returns the IHT421 or C1.
Apply for probate: with the code (or the stamped form) you can complete and submit the application. See our guide to PA1P vs PA1A probate application forms.

Which institutions take part?

There is no published list. GOV.UK names the categories rather than the firms: banks, building societies and investment providers, and it says investment providers “can include National Savings & Investments (NS&I), brokers investment firms, wealth management accounts”. IHT423 itself is headed for a brokers account, an investment management firm account, or a bank, building society or NS&I account.

GOV.UK adds the caveat plainly — when you ask an institution to make you a personal representative, “each one will do this in a different way and some may not be part of the Direct Payment Scheme”. So ask each one directly rather than assuming; anyone who tells you a particular high street bank is in or out is not quoting a published source.

If the deceased’s provider is not part of the scheme, GOV.UK lists the other ways of paying: from your own bank account or a joint account held with the deceased (which you can claim back from the estate once you have probate), by telephone banking, at a bank or building society, by cheque through the post, using government stock through Computershare, or — where you genuinely cannot release funds — by asking HMRC to postpone payment.

Paying IHT on Property (Instalments)

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 at the end of the sixth month after the death — GOV.UK’s example: died 12 January, first instalment due 31 July. Later instalments fall on that date each year.
You do not pay interest on the first instalment unless you pay it late. On each later instalment you pay interest on the full outstanding balance, and on the instalment itself if it is late.
For assets inherited from 6 April 2026 onwards, instalments are interest-free where the asset qualifies for Agricultural Relief or Business Relief. This does not apply to assets you were already paying instalments on before that date.
If the property is sold, the tax must be paid in full — you cannot keep paying by instalments once the asset has gone.
The instalment option also covers agricultural and business property, controlling shareholdings, and certain unlisted shares worth more than £20,000.

For detail on how delays and interest interact, see our guide to probate delays and IHT interest charges.

What if the Estate Cannot Pay the IHT Due?

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.
Ask HMRC to postpone payment: GOV.UK has a route for exactly this — “If you’re unable to release funds from the estate and cannot pay another way, you can ask to postpone paying Inheritance Tax” (a grant on credit). Interest still runs.
Bridging finance: some lenders offer probate bridging loans for this situation. These are commercial products with their own costs; we do not publish rates or recommend providers.
Instalment option: Use instalments for property IHT (see above) and pay other IHT from any available liquid assets.

For the overall IHT position and reliefs that might reduce the bill, see our inheritance tax guide for 2026–27. For the full probate process, see our complete UK probate guide.

Related Guides

The Chicken-and-Egg Problem

The legal position is clear but frustrating:

HMRC will not release what you need for the probate application until the tax is paid or a payment arrangement is in place. In England and Wales that is a unique code HMRC sends you so you can apply for probate online — the old IHT421 ‘probate summary’ was withdrawn for England and Wales on 18 January 2024 and now applies only in Northern Ireland. In Scotland, HMRC stamps and returns form C1 so you can apply for confirmation.

The probate service will not issue a grant of representation (confirmation, in Scotland) until the inheritance tax position is confirmed.

Banks and other institutions will not release estate funds to the executor without that grant.

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

Get yourself recognised by the institution: ask the bank, building society or investment provider to make you a personal representative. Each one does this differently, and GOV.UK warns some may not be part of the scheme at all.

Obtain the inheritance tax payment reference number: apply to HMRC at least three weeks before you want to make the payment. You will need it on IHT423.

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 institution, not HMRC: the form says so in terms — “Send the form to the bank, building society, NS&I, brokerage company and investment manager firms, and not to HM Revenue and Customs”. A separate form for each account. In signing it you confirm you have applied for a grant of representation or confirmation.

Send the IHT400 and schedules to HMRC: in Northern Ireland include probate summary IHT421; in Scotland include confirmation form C1.

HMRC confirms payment: in England and Wales HMRC sends you a unique code so you can apply for probate online. In Northern Ireland and Scotland HMRC stamps and returns the IHT421 or C1.

Apply for probate: with the code (or the stamped form) you can complete and submit the application. See our guide to PA1P vs PA1A probate application forms.

Which institutions take part?

Paying IHT on Property (Instalments)

Key points on property instalments:

The first instalment is due at the end of the sixth month after the death — GOV.UK’s example: died 12 January, first instalment due 31 July. Later instalments fall on that date each year.

You do not pay interest on the first instalment unless you pay it late. On each later instalment you pay interest on the full outstanding balance, and on the instalment itself if it is late.

For assets inherited from 6 April 2026 onwards, instalments are interest-free where the asset qualifies for Agricultural Relief or Business Relief. This does not apply to assets you were already paying instalments on before that date.

If the property is sold, the tax must be paid in full — you cannot keep paying by instalments once the asset has gone.

The instalment option also covers agricultural and business property, controlling shareholdings, and certain unlisted shares worth more than £20,000.

For detail on how delays and interest interact, see our guide to probate delays and IHT interest charges.

What if the Estate Cannot Pay the IHT Due?

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.

Ask HMRC to postpone payment: GOV.UK has a route for exactly this — “If you’re unable to release funds from the estate and cannot pay another way, you can ask to postpone paying Inheritance Tax” (a grant on credit). Interest still runs.

Bridging finance: some lenders offer probate bridging loans for this situation. These are commercial products with their own costs; we do not publish rates or recommend providers.

Instalment option: Use instalments for property IHT (see above) and pay other IHT from any available liquid assets.

For the overall IHT position and reliefs that might reduce the bill, see our inheritance tax guide for 2026–27. For the full probate process, see our complete UK probate guide.