Executor loan

[melonfool]

Hi

I understand that I need to pay IHT on mum's estate before I can apply for probate.

By my estimate, to-date, this looks like it will be around £15k. I do have this money but not in accounts that I want to release it from due to tax free status etc. My non-tax-free accounts are taking a big hit currently with some household repairs I have been trying to deal with, so they are depleted pending the insurer settlement.

Of course, the final IHT could be more (house sale) or even potentially less.

Firstly - am I right that I (the executor) need to pay this before I can get probate and therefore release the monies and sell the house?

If so, does anyone have any recommendations of a provider for executor loan, or bridging loan, and any idea what the interest rates are likely to be (I know this charged to the estate). And any views on whether just taking a 'normal' loan would be better, cheaper, easier etc (I assume the short term nature means that is less likely to work).

I've never had a loan!

Thanks
Mel

[DrFfybes]

Certain organisations will release funds to HMRC for payment of IHT, NS&I I gather will do this, but others also.

https://www.moneyhelper.org.uk/en/famil ... itance-tax

scroll down to "Who pays Inheritance Tax? " and see the bit about the Direct Payment Scheme.

For such a relatively small amount I don't think(!) you should have aproblem provided she had sufficient cash savings.

Paul

[melonfool]

Certain organisations will release funds to HMRC for payment of IHT, NS&I I gather will do this, but others also.

https://www.moneyhelper.org.uk/en/famil ... itance-tax

scroll down to "Who pays Inheritance Tax? " and see the bit about the Direct Payment Scheme.

For such a relatively small amount I don't think(!) you should have aproblem provided she had sufficient cash savings.

Paul

Oh, interesting. There is plenty of cash. Only Nationwide has said they can release funds for HMRC, I had assumed it was only for unpaid income tax (and £101 I had to pay back to DWP for overpaid attendance allowance, they then sent me £600 for this years winter fuel allowance, you honestly couldn't make this stuff up).

That should be fairly clean then, I'll ask Nationwide what the process is. It will no doubt be difficult and convoluted, but isn't everything!

Thanks

Mel

[Loup321]

If your tax-free status is about ISAs, can't you take the money out and replace it within the tax year and it retain its ISA status? I'm not sure whether this applies to all products with all providers or you have to have a specific flexible ISA. Maybe wait until April before doing anything in that case, to be sure to get it back in within the same tax year.

[melonfool]

If your tax-free status is about ISAs, can't you take the money out and replace it within the tax year and it retain its ISA status? I'm not sure whether this applies to all products with all providers or you have to have a specific flexible ISA. Maybe wait until April before doing anything in that case, to be sure to get it back in within the same tax year.

I can't wait til April I have to pay the IHT before that. But yes, ISAs and/premium bonds. Though it's not just the tax free status, it's also that most of them are fixed rate plus I'd be paying interest, as well as not earning interest.

But it looks as if I can get mum's bank to pay it, so I'll start off down that route!

Mel

[scrumpyjack]

If you get an IHT reference number from HMRC, any bank will pay HMRC using that reference number from the deceased's account. I think it is called 'the direct payment scheme'

Also IHT on property can be paid in instalments and does not all need to be paid before probate (HMRC do charge interest)

[yorkshirelad1]

As others have noted: HMRC's "Direct Payment Scheme"
https://www.gov.uk/paying-inheritance-tax/deceaseds-bank-account

Most banks should be able to do this.

(There was a suggestion a few years ago that NS&I did something similar, but they could be quite slow in paying, but ISTR that NS&I are now part of the "Direct Payment Scheme" so operate like any other bank in that respect).