Can we use the property sale proceeds to pay Inheritance Tax before probate is granted?

Sometimes the difficulty with Inheritance Tax is not the tax itself but the cashflow. HMRC may need payment to start before the grant is issued, yet the estate’s main value may be tied up in the property. There are…

Sometimes the difficulty with Inheritance Tax is not the tax itself but the cashflow. HMRC may need payment to start before the grant is issued, yet the estate’s main value may be tied up in the property.

There are potential routes through that. In some cases tax on certain assets can be paid by instalments. In others, funds may be released from the deceased’s bank to help with funeral expenses or tax. The detail matters, and it is worth addressing early rather than treating it as a last-minute surprise.

The broader lesson is simple: where a house is the main estate asset, tax planning and sale strategy should be thought about together.

Related reading

• How to sell a probate property: a clear step-by-step guide for executors and familiesHow to sell a probate property: a clear step-by-step guide for executors and families/probate-guides/how-to-sell-a-probate-property/
• Inheritance Tax — do we owe it, and how much?Inheritance Tax — do we owe it, and how much?/knowledge-hub/inheritance-tax-on-a-probate-property/
• Do I pay tax when selling a probate property?Do I pay tax when selling a probate property?/knowledge-hub/capital-gains-tax-on-a-probate-property-sale/
• Who pays for the property costs while we wait?Who pays for the property costs while we wait?/knowledge-hub/who-pays-the-bills-on-a-probate-property/
• Do we still have to pay council tax on an empty probate property?Do we still have to pay council tax on an empty probate property?/knowledge-hub/does-an-empty-probate-property-pay-council-tax/
• Can the estate pay Inheritance Tax before the house is sold?Can the estate pay Inheritance Tax before the house is sold?/knowledge-hub/can-inheritance-tax-be-paid-before-the-property-is-sold/