Can You Get a Loan to Pay an Inheritance Tax Bill?

Being an executor comes with quite a few responsibilities, including paying inheritance tax on time.

But what if the estate's cash isn't readily available?

With HMRC requiring the IHT payment within six months of the person’s death, many executors and beneficiaries find themselves in a tough spot – the estate might be worth a considerable sum, but the cash to pay the tax bill isn’t accessible until probate is finalised.

The good news?

You do have several options to borrow money to pay inheritance tax, including specific inheritance tax loans and bridging finance designed for exactly this situation.

Whether you’re an executor managing an estate or a beneficiary looking to keep inherited property intact, understanding these borrowing options will help you make sound decisions during what’s already a challenging time.

Understanding Inheritance Tax Payment Deadlines

The clock starts ticking on inheritance tax from the day someone passes away.

HMRC expects you to pay at least some of the tax within six months – even though you might not have received the grant of probate or access to the estate’s assets yet.

Missing this deadline means HMRC will add interest charges to your bill, which soon mount up.

Interest rates change quarterly, so what might start as a manageable sum can grow quickly. You’ll want to avoid this situation, as these charges come out of the estate, reducing what’s left for beneficiaries.

HMRC does understand that settling an estate takes time.

In some cases, they’ll accept payment in yearly instalments, particularly when the tax bill relates to property or certain business assets. But you’ll need to ask for this option – it’s not automatic.

Sometimes estates face genuine difficulties, such as complex overseas assets or property that’s hard to sell. HMRC might show flexibility in these situations, but you’ll need to keep them informed and explain your circumstances.

They’re more likely to work with you if you’ve been upfront about any problems from the start.

The real challenge is that most assets in the estate are ‘frozen’ until you’ve paid at least some inheritance tax.

It’s a bit of a catch-22 – you need to pay the tax to access the assets, but you might need to access the assets to pay the tax.

That’s where specific inheritance tax loans come in handy.

Types of Loans Available for Inheritance Tax

When you need to pay an inheritance tax bill, there are different borrowing options depending on your role in the estate.

Executor Loans

If you’re an executor, an executor loan offers the most straightforward solution. These loans are specifically designed for executors who need to pay inheritance tax before getting probate.

Banks and specialist lenders provide inheritance tax loans to anyone named as an executor in the will. You’ll need to show your grant of probate application is underway, along with evidence of the estate’s assets and their value, and the tax due.

The big advantage is that the loan gets repaid from the estate funds once probate comes through – it’s not a personal debt.

You won’t need to provide personal security or take on personal risk.

Related: Can an Executor Pay Beneficiaries Before Probate is Granted?

Probate Loans

Like executor loans, probate loans let you borrow against the value of the estate itself and are used by beneficiaries. The loan gets repaid directly from the estate once probate comes through and assets are sold or distributed.

You won’t need to make monthly payments – the interest rolls up and gets settled along with the main loan amount when the estate is finalised. Most lenders will advance between 50% and 60% of the expected inheritance value.

Bridging Finance

If you’re an executor, and you own property with sufficient equity, you might consider a bridging loan. This means using your own property as security to raise funds quickly via a short term secured loan.

However, this option carries personal risk – you’re putting your own property up as security. Only consider this if you’re completely certain about your inheritance and how you’ll repay the loan.

Most people find probate loans a safer option but they can also be more expensive.

And if probate drags on, having a bridging loan may affect your ability to move home or remortgage.

Read more: Can you get a bridging loan while waiting for probate?

Let’s talk loans!

Book your free consultation today and let’s discuss how we can help you with your borrowing needs.

How to Choose the Right Type of Loan

Your role in the estate largely determines which loan best suits your situation.

As an executor, an executor inheritance tax loan usually offers your best option.

These loans are specifically designed for your role and don’t put your personal assets at risk. They work well when you’re dealing with a clear-cut estate and need to pay the inheritance tax to move forward with probate.

The loan gets repaid from the estate once probate comes through, and you won’t face personal liability.

Probate loans provide another solid choice for beneficiaries.

They work particularly well when the estate includes a mix of assets but lacks ready cash. If you’re confident about the estate’s final value but just need to unlock some cash then these loans can help.

Choosing a bridging loan over these two options would seem unlikely.

Neither require personal guarantees or security over your home. But probate and executor loans can get expensive.

So in the best interest of the estate, some executors choose to take out a bridging loan instead, as the interest charges can be lower.

Who Can Apply for Inheritance Tax Loans?

Your role in the estate directly affects your choices and as an executor, you have the most straightforward options.

You can apply for an executor loan once you can show the will naming you as executor, along with proof of the estate’s value. The estate itself provides the security, so your personal finances don’t come into play. Most lenders just need to see the will, death certificate, and estate accounts showing what assets exist and the IHT due.

If you’re a beneficiary of the estate, you can apply for a probate loan.

These use your future inheritance as security. You’ll need to prove your entitlement with the will and estate paperwork, plus show enough assets exist in the estate to cover both the loan and the inheritance tax.

The main requirements for each loan type are straightforward:

For executor loans:

  • Proof you’re the named executor
  • Estate details and asset values
  • Your ID and address documents

For probate loans:

  • Evidence of your inheritance
  • Estate valuations
  • Confirmation of your share of the estate

Alternative Options to Consider

Before taking out any type of inheritance tax loan, you will want to explore other payment options.

As an executor you are responsible for calculating the IHT bill and making the payment.

Your first step should be checking if HMRC will accept instalments. They often allow inheritance tax on property or business assets to be paid in yearly instalments over ten years. You’ll pay 10% of the tax each year, plus interest.

But even with instalments you will need to access funds outside of the estate until probate is granted.

You could use your own savings, or borrow the money personally. Borrowing could involve a personal loan, remortgage or bridging loan.

Life insurance policies written in trust can be used to cover inheritance tax bills. If the deceased had such a policy, check its status – these pay out quickly, won’t form part of the estate and therefore don’t need probate.

How a Specialist Broker Can Help

Finding the right loan to pay an inheritance tax bill involves comparing multiple options from different lenders.

A specialist broker makes this much simpler by matching your situation to suitable lenders and loan types.

Many lenders who offer inheritance tax loans don’t deal directly with the public – they only accept applications through brokers. A broker’s network includes specialist lenders, private banks, and mainstream institutions, giving you access to more options than you’d find on your own.

A good broker understands how different loans work in practice. They’ll look at your full situation – the estate’s assets, your role, timeframes, and preferences – then recommend the most suitable ways forward.

They’ll explain which lenders might offer better terms for your circumstances.

Having someone manage the whole process saves you time and stress.

Your broker will handle the application, chase updates, and sort out any issues that come up. They’ll liaise between lenders, solicitors, and valuers, keeping everything moving towards completion.

Next Steps

Ready to sort out your inheritance tax payment?

First, check your role – are you an executor, a beneficiary, or both? This affects which options suit your situation best.

Gather the essential paperwork:

  • The death certificate
  • The will
  • Estate valuations
  • Your ID documents
  • Proof of your role or inheritance

A quick chat with a specialist broker will help clarify your options. They’ll explain which solutions match your circumstances and help you avoid taking on unnecessary personal risk.

Remember that acting sooner gives you more choices and helps avoid HMRC interest charges, but don’t feel pressured into decisions that make you uncomfortable.

This article provides general information about probate and estate distribution. It is not legal advice. Every estate is unique, and laws can change. Always consult a qualified legal professional or probate specialist before making decisions about estate administration, tax or inheritance.

FAQ

An executor manages the deceased person’s estate and holds legal responsibility for paying the inheritance tax bill. As executor, you must:

  • Value the estate’s assets and work out how much tax needs paying
  • Submit inheritance tax forms to HMRC
  • Pay any inheritance tax due within six months of the death
  • Apply for probate (which won’t be granted until at least some tax is paid)
  • Collect in the estate’s assets
  • Pay any debts
  • Distribute what’s left to the beneficiaries

The challenge? You often need to pay the inheritance tax before you can access the estate’s money through probate. That’s why executor loans exist – they help you break this circle by providing funds to pay the tax, secured against the estate rather than your personal assets.

As executor, you won’t be personally liable for the inheritance tax unless you make mistakes in handling the estate. However, you do need to deal with it properly and on time to avoid interest charges building up against the estate.

Related: Can an Executor Pay Beneficiaries Before Probate is Granted?

Most inheritance tax loans can be arranged within 2 weeks. Bridging loans might complete in as little as 7-10 days, while probate loans typically take 2 weeks from application to funds release.

Not normally. Most lenders offer rolled-up interest options where you pay everything at the end of the term when the estate is settled. With some you can choose to make monthly payments if you prefer.

For probate and executor loans, your personal credit score isn’t a factor as the loan is secured against the estate. However, for bridging loans, lenders will check your credit history.

Related: The Bridging Loan Application Process Explained

Yes, many lenders offer pre-probate loans. They’ll want to see the will and estate details to confirm your inheritance or role as executor.

Yes, alternatives include HMRC’s instalment option for property-based tax, using personal savings or family lending.

Our inheritance tax lenders set their minimum loan at £100,000, though some specialist lenders might consider smaller amounts.

This depends on the loan type. Probate loans use the estate as security and bridging loans need property owned outside of the deceased’s estate.

Related: How to Pay Inheritance Tax Without Selling a Property

No.

You can still apply for certain types of loans, particularly if you’re inheriting specific assets like property.

HMRC doesn’t need to know how you’ve arranged to pay the tax – they’re only concerned that it’s paid on time.

Probate loans come from specialist lenders rather than high street banks.

Your best route is through a specialist finance broker who works with these lenders. Brokers know which lenders offer the best terms for different situations and can often access exclusive rates.

Some private banks also offer probate loans, but they usually only lend larger amounts (over £500,000). Most lenders won’t accept direct applications, as they prefer working through brokers who help prepare the right documentation and manage the application process.

This depends entirely on the type of loan you choose.

Probate loans and executor loans are secured against the estate itself, not your personal assets, so your home isn’t at risk.

However, if you opt for a bridging loan and use your own property as security, that property would be at risk if you couldn’t repay the loan.

Related: Can you get a bridging loan while waiting for probate?

Still have more questions?

Just give us a call on 0330 030 5050 to get matched with an expert.
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