Tax Finance for Executors and Estates
Dealing with an estate is one of the most demanding financial and administrative tasks an individual can face. The 6-month inheritance tax deadline - combined with a probate process that regularly takes longer - creates a structural funding gap that leaves executors personally exposed to HMRC interest accrual.
Pay Inheritance Tax Before Probate
Doulton Bridging Finance handles estate tax bridging with care, working alongside your solicitor to arrange IHT finance quickly and sensitively.
Executor Tax Finance - August 2026
| Estate scenario | Rate | Key consideration | Notes |
|---|---|---|---|
| Property-rich estate - IHT due before probate | 0.65%-0.80%/month | Standard estate bridging. Most common scenario. | Executor borrows against estate property. Repaid from property sale after probate. |
| Multiple beneficiaries - one wants to retain property | 0.70%-0.85%/month | Buyout structure required. | Bridge allows IHT payment while the buyout is structured. More time for agreement. |
| Estate includes business assets (BPR changes April 2026) | 0.70%-0.85%/month | BPR cap at £1m from April 2026. | The new £1m BPR cap may make more estates eligible for IHT bridging. |
| Contested estate - IHT not in dispute | 0.75%-0.90%/month | The IHT obligation is separate from the estate dispute. | IHT must still be paid regardless of beneficiary disputes. |
| Pension assets newly in estate (April 2026) | 0.70%-0.85%/month | Pension assets now in IHT estate. | April 2026 pension IHT change increases estate IHT liabilities significantly. |
Indicative rates - August 2026. Rates change daily. Actual rate depends on LTV, security, credit profile, loan size, and exit strategy. Contact our team for a live rate comparison for your specific case. All rates sourced from lender product sheets and publicly available market data.
What determines your rate
April 2026 - pensions now in the IHT estate
From April 2026, pension assets are included in the IHT estate - previously exempt. This is one of the most significant IHT changes in decades. Individuals with significant defined contribution pension pots will see their estate IHT liability increase substantially. Estate planning that previously relied on pensions to pass wealth IHT-free must now be revised. More estates will need IHT bridging as a result.
Residence nil-rate band conditions
The RNRB (up to £175,000 per person, £350,000 per couple) is available when a property passes to direct descendants. It is reduced by £1 for every £2 the estate exceeds £2 million (fully withdrawn at £2.35m for individuals). Accurately calculating the threshold and the IHT liability requires professional advice - the executor should engage a solicitor or specialist estate accountant.
HMRC instalment option for property
HMRC allows IHT on certain property assets to be paid in annual instalments over 10 years, with interest. This option is available for qualifying UK property, land, and unlisted shares. It is worth considering for estates where the primary asset is property and a forced sale is undesirable. However, interest at 7.75% p.a. applies - compare with bridging costs over the instalment period.
Working with the estate solicitor
Most estate bridging arrangements are managed in conjunction with the estate's solicitor, who confirms the executor's authority, manages the HMRC payment, and handles the legal aspects of the bridge. DBF works with all reputable estate solicitors and can be referred directly. If you are an executor without a solicitor, we can recommend estate solicitors who work regularly alongside our bridging lenders.
Worked cost example
Estate: 74-year-old died March 2026. Estate includes: primary property (£650,000, no mortgage), BTL property (£280,000, no mortgage), and pension pot (£400,000 - now subject to IHT from April 2026).
Total estate: £1,330,000. Thresholds: NRB £325,000 + RNRB £175,000 (primary property to daughter) = £500,000.
IHT on pension (previously exempt - new from April 2026): £400,000 × 40% = £160,000.
IHT on property excess: (£930,000 - £500,000) × 40% = £172,000.
Total IHT: £332,000. HMRC deadline: September 2026 (6 months from death).
IHT bridge: £332,000 on BTL (£280,000 security) + primary property (£650,000 security).
Combined LTV: £332,000 / £930,000 = 35.7%. Rate: 0.68%/month. Term: 18 months.
Total cost (18 months): approximately £36,500 (including fees).
Repaid from sale of BTL post-probate (October 2026 expected).
Rate context and outlook
April 2026 pension IHT changes and the £1m cap on agricultural and business property relief are the two biggest IHT changes in a generation. Both significantly expand the range of estates affected by IHT and the size of IHT liabilities. Estate planners and solicitors should be aware of these changes and their implications for the need for IHT bridging finance.
Get a personalised rate comparison for your case
Independent, whole-of-market advice across 130+ specialist lenders. Doulton Money Ltd is authorised and regulated by the Financial Conduct Authority, FRN 814533.
Frequently asked questions
Can an executor borrow money before probate is granted?
Yes - an executor has the legal authority to manage the estate's assets before probate is granted, including borrowing against estate assets to pay HMRC liabilities. The executor acts on behalf of the estate, not personally. It is strongly advisable to involve the estate's solicitor to confirm the authority and document the borrowing correctly.
What is HMRC's grant on credit for IHT?
HMRC offers a grant on credit for estates that cannot pay IHT in cash - essentially lending the estate the funds to pay IHT, repayable when the estate assets are sold. Since April 2024, executors no longer need to demonstrate they have sought commercial loans before applying. The grant is interest-free initially but HMRC's standard rate applies thereafter. It is only available for directly-held property and shares - not trust assets or pension assets. For estates with complex assets, bridging is often faster and more flexible.
What happens if IHT is not paid within 6 months?
HMRC charges interest at 7.75% per annum on unpaid IHT from the due date (6 months after death). Penalties can also apply for deliberate or negligent failure to pay. Critically, the grant of probate may be delayed where HMRC has not received the IHT payment - which in turn delays the executor's ability to sell estate assets to repay the debt. Paying on time avoids this circular problem.
Does the April 2026 pension change affect IHT planning?
Significantly - pension assets are now included in the estate for IHT purposes from April 2026. Previously, pensions were commonly used as IHT-efficient wealth transfer vehicles. Planning that relied on pensions being IHT-exempt must now be revised, and executors should expect higher IHT liabilities on estates with large pension pots. Estate solicitors and financial planners should review existing IHT plans.
Can I use the estate's bank account to pay IHT before probate?
Most banks will release funds from the deceased's accounts directly to HMRC to pay IHT - this is specifically authorised under the Direct Payment Scheme. Contact the relevant banks to arrange this. Where bank funds are insufficient, or where accounts are frozen pending verification, bridging provides an alternative route. The two approaches (bank release and bridging) can be used in combination.
Explore tax payment finance
Talk to someone who knows your position
Every tax deadline has a different lender answer. Tell us your circumstances and we will match them to the lenders that price your case properly, not the ones that decline it.