INT Payment

[zaxtab]

Before Probate is granted I believe any IHT due needs to be paid to HRMC first.
If this is the case can it be paid from the estate,and if so are there any conditions that need to be met?
When preparing for Probate is there any reference to above on appropriate form filling?

Thank you

[zaxtab]

IHT

[AGoodman]

No conditions. The Executors/Administrators have an indemnity to recover from the estate all expenses properly incurred in the administration of the estate. that would include IHT.

I'm afraid I don't understand your second question.

[zaxtab]

Is there anything written down that suggests that IHT can come from the estate?,…as I suspect there maybe other options..like taking out a loan or direct loan payment from Administrator….

[AGoodman]

The PRs have a right to recover the inheritance tax from the estate. see e.g. s.34 Administration of Estates Act 1925 but it is not in any doubt.

The PRs may not be able to use the estate to pay the IHT directly pre-probate because, for example, they need the grant of probate to access and/or sell assets. That is where PRs will usually have to borrow or use their own funds and then reimburse themselves from the estate once they have received the grant and are able to access/sell estate assets.

There is also a scheme to allow you to use the deceased's bank accounts to pay IHT directly to HMRC pre-probate using form IHT423.

The PRs can of course just pay the tax from their own resources and not reimburse if if they want to, but that may have tax consequences.