Probate Delays and IHT Interest: What Executors Need to Know

Quick Summary

• Payment deadline: IHT must be paid within 6 months of the end of the month in which death occurred
• Interest rate: 8.75% per annum on late payments (from April 2025)
• Probate timeline: Average 9+ weeks, but can take months longer
• The problem: You often can't access estate funds to pay IHT until you have probate
• The solution: Direct Payment Scheme allows banks to pay HMRC before probate

The Probate and IHT Timing Problem

Executors face a frustrating catch-22 situation. This timing challenge is part of the broader probate process in the UK:

1. IHT must be paid within 6 months of the end of the month of death
2. You can't get probate until at least some IHT is paid (if IHT is due)
3. You can't access the deceased's money to pay IHT until you have probate
4. Probate can take 9+ weeks even for straightforward applications

This creates a situation where interest can accrue even when executors are doing everything correctly, simply because the system is slow.

Current Probate Timelines

As of late 2026, probate processing times are:

The Direct Payment Scheme

The Direct Payment Scheme (also called the "IHT Direct Payment Scheme") allows executors to arrange for banks and building societies to pay inheritance tax directly to HMRC from the deceased's accounts - before probate is granted.

How It Works

1. Complete form IHT423 (one form per bank/building society)
2. Send the form to each bank holding the deceased's money
3. The bank pays HMRC directly and provides you with confirmation
4. Use this confirmation when applying for probate

Which Banks Participate?

Most major UK banks and building societies participate in the scheme, including:

• Barclays, HSBC, Lloyds, NatWest, Santander
• Nationwide and other building societies
• Most savings and investment providers

Note: Not all institutions participate, and some may have limits on the amount they'll release. Check with each institution directly.

Limitations

• Only works for cash deposits - not investments, property, or other assets
• Some banks may not release the full amount needed
• Doesn't help if the deceased's main assets are property

Other Options for Paying IHT Before Probate

1. Pay from Your Own Funds

Executors can pay IHT from their own money (or borrowed money) and reimburse themselves from the estate later. This avoids interest charges but requires having access to significant funds.

2. Executor Loans

Some specialist lenders offer "executor loans" or "probate loans" specifically for this purpose. The estate repays the loan once probate is granted. Interest rates vary but are often lower than HMRC's 8.75% rate.

3. Instalment Option

For certain assets (property, land, business assets, shares), IHT can be paid in 10 annual instalments. Interest is usually charged on the outstanding balance, but for agricultural and business property, the instalments are interest-free.

4. National Savings

NS&I Premium Bonds and other National Savings products can usually be cashed in before probate to pay IHT.

Calculating Your IHT Deadline

IHT is due by the end of the 6th month after the month of death:

What If You Can't Pay on Time?

If you genuinely cannot pay the full IHT by the deadline:

1. Pay what you can: Partial payment reduces the amount on which interest accrues
2. Use the instalment option: If available for the estate's assets
3. Contact HMRC: In exceptional circumstances, they may agree payment arrangements
4. Consider a loan: Executor loans may work out cheaper than HMRC interest

Tips for Executors

Managing IHT deadlines effectively is crucial. For comprehensive guidance on all executor responsibilities, see our complete probate guide.

Start Early

• Begin gathering financial information immediately
• Request valuations for property and assets as soon as possible
• Don't wait until you have complete information to start the IHT return

Use Estimates If Necessary

• HMRC accepts estimated values on initial returns
• It's better to pay estimated IHT and get a refund than to miss the deadline
• You can correct values later when final figures are known

Keep Records

• Document all steps taken and dates
• Keep copies of all correspondence with HMRC, banks, and valuers
• If delays are caused by third parties, having evidence may help

Key Takeaways

• IHT must be paid within 6 months of the end of the month of death
• HMRC charges 8.75% interest on late payments (from April 2026)
• The Direct Payment Scheme lets banks pay HMRC before probate
• Probate delays can cause interest to accrue even when you're doing everything right
• Executor loans, personal funds, or the instalment option may help
• Start the IHT process early and use estimates if necessary
• For estates with property or complex assets, delays are common - plan accordingly