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.
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The Direct Payment Scheme (DPS) can allow a participating bank, building society or investment provider to pay Inheritance Tax directly to HMRC from the deceased's account before probate is granted. You send a separate form IHT423 for each account you want to pay from. Participation, account eligibility and evidence requirements vary, so confirm the process with each provider.
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 — including land and buildings, controlling shareholdings and qualifying unlisted shares. A value over £20,000 does not by itself make unlisted shares eligible; check GOV.UK's additional tests covering ownership, the proportion of the estate's Inheritance Tax or financial difficulty. 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 for new assets inherited from 6 April 2026 the instalments are interest-free where the asset qualifies for Agricultural Relief or Business Relief. This does not apply to assets already being paid by instalments before that date, and late instalments still attract interest. You must elect for instalments on form IHT400.
If estate funds cannot be released, HMRC may consider an application for a grant on credit. You send form IHT400 with a letter explaining why funds cannot be released, the maximum amount available and the steps being taken to raise the balance. HMRC considers each case and may require a legally binding undertaking. Interest continues to accrue, so this is not an automatic or cost-free route.
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.
In England and Wales, once HMRC has processed the IHT400 and the required payment, it sends the unique code used for an online probate application. Processing time can vary, so keep the payment evidence and follow current HMRC instructions rather than relying on a fixed turnaround.