How to instruct a bank to pay inheritance tax directly to HMRC before probate is granted — form IHT423, participating banks, the instalment option for property, and what to do if you cannot pay.
This guide is part of ProbateHelp's Probate Process guide cluster. Estimated reading time: 14 min.
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The Direct Payment Scheme (DPS) allows banks, building societies, NS&I, and certain investment providers to pay inheritance tax directly to HMRC from the deceased's accounts before probate is granted. You complete form IHT423 and send it to each institution you want to pay from. HMRC sends the probate code after it has the IHT400 and enough payment, usually within 20 working days of whichever arrives later.
The Direct Payment Scheme is voluntary, so you should check with each bank, building society or investment provider before relying on it. GOV.UK says some providers may not be part of the scheme. NS&I, brokers, investment firms and wealth management accounts can be relevant, but each provider controls its own process.
Inheritance tax must be paid by the end of the sixth month after the person died. For example, if they died in January, the deadline is 31 July. HMRC charges interest on any tax paid after the due date. You can make payments on account before you know the exact amount owed.
Yes, for certain assets that are difficult to sell quickly — primarily land and buildings (including the family home), controlling shareholdings, and unlisted shares worth over £20,000. You can pay in 10 equal annual instalments, with the first due at the end of month six. Interest applies on most instalment payments, though from 6 April 2026 assets qualifying for Agricultural Relief or Business Relief are interest-free. You must elect for instalments on form IHT400.
If you genuinely cannot access estate funds and cannot pay from your own resources, you can apply to HMRC for a 'grant on credit' — probate issued before full IHT is paid. You must send form IHT400, a letter explaining why funds cannot be released, and the maximum amount you can pay. HMRC will ask you to sign an undertaking to pay as soon as possible. Interest continues to accrue. This is a last resort — HMRC expects you to exhaust all other options first.
GOV.UK says IHT423 is used for money from the deceased's bank, building society or investment account, and the form was updated on 24 February 2025 after investment-fund information was added in October 2024. Pension and life assurance treatment depends on whether the asset forms part of the taxable estate and whether the provider can make a direct payment, so check with the provider before relying on the scheme.
Once HMRC has received the IHT400 and enough payment, it will send you a unique code. GOV.UK says this usually takes 20 working days from receiving the IHT400 or payment, whichever is later. You use this code when applying for probate online.