HMRC and Probate: The Tax Step That Comes Before the Grant

HMRC handles the tax side of probate. Before the Probate Registry will issue a grant in England and Wales, you must report the estate's value to HMRC and pay any Inheritance Tax due, using form IHT400 unless the estate is excepted. HMRC then confirms this to the probate service, and your application can proceed.

That split surprises many executors. Probate involves two separate arms of government: HM Courts and Tribunals Service (HMCTS), which issues the grant through the Probate Registry, and HM Revenue and Customs (HMRC), which assesses and collects Inheritance Tax. HMRC comes first, and nothing moves until the tax step is done.

This guide explains exactly what HMRC needs from you, which form applies (the full IHT400 account, or the excepted estates route that replaced IHT205), the 2026 thresholds including the residence nil-rate band, how to pay a tax bill out of money you cannot yet touch, and a realistic timeline from death to grant. And because probate only deals with what someone owned, never who they were, we also touch on the other kind of legacy: a digital legacy app lets you preserve your voice, memories and stories as a Persona while you are alive. Start free: 50 memories, no card.

In this guide:

• What HMRC actually does in probate

• IHT400 vs IHT205: which form applies

• Inheritance Tax thresholds in 2026

• The IHT400 route, step by step

• Paying the tax before the grant

• The probate and tax timeline

• Common delays and how to avoid them

• Executor checklist

• Frequently asked questions

What HMRC actually does in probate

When someone dies, their estate (the money, property and possessions they leave behind) has to be valued, reported and taxed before it can be distributed. HMRC owns the middle of that sequence. The executor or administrator values everything the person owned and everything they owed, works out whether Inheritance Tax applies, reports the figures to HMRC where required, and pays any tax due. Only then will the Probate Registry issue the grant that banks, the Land Registry and share registrars insist on seeing.

The handover between the two bodies changed in 2024. HMRC no longer stamps and returns the old IHT421 receipt in England and Wales. Instead, once it has processed your IHT400 account, HMRC posts you a letter containing a unique code and the estate values it has recorded. You quote that code in your probate application, and HMCTS matches it against HMRC's records electronically.

The grant itself, whether a grant of probate where there is a will or letters of administration where there is not, comes from the Probate Registry, not HMRC. Our guide to probate in the UK covers the application side in full. This page focuses on the HMRC half, which is where most of the money, and most of the delay, lives.

One scope note: probate procedure here describes England and Wales. Scotland uses confirmation through the sheriff court, and Northern Ireland has its own registry and forms. Inheritance Tax itself, however, is UK-wide, so the thresholds and HMRC forms below apply across all four nations.

IHT400 vs IHT205: which form applies

Search for probate HMRC forms and you will find years of advice about choosing between the short IHT205 return and the full IHT400 account. Most of it is out of date. For deaths on or after 1 January 2022, IHT205 no longer exists. Excepted estates (broadly, estates that owe no tax and fit within set limits) stopped filing any separate HMRC return at all. Their gross and net values are declared directly inside the probate application. IHT205 only still matters if you are dealing with a death before 2022.

An estate normally counts as excepted in one of three situations:

• Low value estates. The gross value is below the £325,000 nil-rate band, or below £650,000 where the full unused allowance of a previously deceased spouse or civil partner is being transferred.

• Exempt estates. The gross value is £3 million or less, and everything above the nil-rate band passes tax free to a spouse, civil partner or charity, leaving no tax to pay.

• Foreign domiciliaries. The person lived permanently abroad and their UK assets are worth less than £150,000.

Everything else needs the full IHT400 account, sent to HMRC with its supporting schedules. In practice that means IHT400 is required when tax is actually due, but also in several situations where it may not be, including: the estate needs the residence nil-rate band to escape tax (that allowance can only be claimed through IHT400, using schedules IHT435 and IHT436); substantial gifts were made in the 7 years before death; the person held certain trust interests or foreign assets above the limits; or only part of a late spouse's allowance is being transferred.

The trap to avoid is assuming that no tax means no IHT400. A £900,000 estate left to children may owe nothing once both nil-rate bands and both residence bands are counted, yet it still needs the full account, because the residence nil-rate band must be formally claimed. Getting this call wrong at the start is one of the most expensive mistakes an executor can make in time terms.

Inheritance Tax thresholds in 2026

The headline figures, set out on GOV.UK, have been frozen for years and remain frozen until at least April 2030:

Two further points shape most real estates. First, transfers between spouses and civil partners are generally exempt without limit, which is why tax so often falls on the second death rather than the first. Second, the freeze matters: house price growth against a fixed £325,000 band pulls more ordinary families into scope every year, which is exactly why more executors are meeting IHT400 for the first time.

Looking slightly ahead: under changes announced in the 2024 Autumn Budget, most unused pension funds and pension death benefits are due to come within Inheritance Tax from 6 April 2027. If you are planning your own estate rather than administering someone else's, that change is worth building into any calculation you do now.

The IHT400 route, step by step

If the estate is not excepted, this is the sequence. The ordering matters, because two of the steps involve fixed waiting periods that cannot be compressed.

1. Get an Inheritance Tax reference number. Apply online through GOV.UK or by post on form IHT422, at least 3 weeks before you intend to make a payment. Every payment must carry this reference or HMRC cannot match it to the estate.

2. Value the estate properly. Assets at open market value at the date of death, debts and funeral costs deducted, plus gifts made in the 7 years before death. For a house, a professional valuation is worth the fee: HMRC can refer property figures to the Valuation Office Agency, and round-number guesses invite queries.

3. Complete IHT400 and its schedules. The main account plus whichever schedules apply: IHT402 to transfer a late spouse's unused allowance, IHT405 for houses and land, IHT435 and IHT436 for the residence nil-rate band, IHT403 for gifts, among others.

4. Pay the tax due, or set up instalments. Payment options are covered in the next section. At minimum, tax on non-instalment assets should be paid when you submit the account.

5. Send IHT400 to HMRC and wait 20 working days. This is a hard rule: you must not apply for probate until 20 working days after submitting the account. During that window HMRC processes the figures and posts you the letter with your unique code.

6. Apply for probate quoting the code. Apply online or on paper form PA1P (with a will) or PA1A (without). The fee is £300 for estates over £5,000, and there is no fee below that.

Paying the tax before the grant

Here is the squeeze at the heart of HMRC's role in probate: Inheritance Tax is due by the end of the sixth month after the month of death, and at least some of it usually has to be paid before the grant is issued. Yet the money to pay it sits in accounts that are frozen until the grant arrives. HMRC charges interest on anything unpaid after the six-month deadline, at its published late payment rate, so waiting is not free.

The system provides several pressure valves:

• The Direct Payment Scheme. Using form IHT423, participating banks and building societies pay HMRC directly out of the deceased's own accounts before the grant. This is the standard first move when the estate holds cash.

• Instalments on illiquid assets. Tax attributable to land, buildings and certain shares or business interests can be spread over 10 equal annual instalments, with interest on the outstanding balance. Sell the asset and the remaining tax falls due at once.

• Assets that can be surrendered directly. National Savings and Investments products and British government stock held by the deceased can be applied to the bill.

• Borrowing. Executor loans from banks and specialist lenders bridge estates that are asset rich but cash poor. In rare hardship cases HMRC can agree a grant on credit, but do not plan around it.

If the final figures change later, as they often do once assets are actually sold, executors submit a corrective account and either pay the difference or claim a refund. Common examples include a house selling for less than its date-of-death value and share prices falling within 12 months of death, both of which carry specific relief claims.

The probate and tax timeline

Every estate is different, but the shape of the journey is remarkably consistent. This is the realistic sequence for an estate that needs the full IHT400 route:

Added together, a straightforward taxable estate realistically takes 6 to 12 months from death to distribution, and the HMRC stages sit on the critical path for most of the first half.

Common delays and how to avoid them

Most probate delay is self-inflicted, in the sense that a stopped application usually traces back to something fixable at submission time. The recurring culprits:

• Applying for probate too early. Submitting the probate application before HMRC's 20 working days have elapsed is one of the most common causes of a stop. The application and the tax record cannot be matched, and everything waits.

• Payments without the IHT reference. Money HMRC cannot allocate is money HMRC treats as unpaid. Get the reference first, every time.

• Residence nil-rate band errors. Forgetting schedules IHT435 and IHT436, or trying to claim the allowance through the excepted estates route, forces reworks that add weeks.

• Optimistic valuations. Property figures that look low get referred to the Valuation Office Agency, and undeclared gifts surface when HMRC reviews bank statements. Compliance checks can add months and, at worst, penalties.

• Document problems. A missing original will, a name that differs between the will and the death certificate, or an unexplained mark on the will all trigger manual review at the registry.

• Paper where digital would do. Around nine in ten applications are now digital, and paper consistently takes longer at both HMRC and HMCTS.

Executor checklist

A condensed working list for the HMRC side of the job:

• Register the death and order several certified copies of the death certificate.

• Find the will and confirm who the executors are. If there is no will, the intestacy rules decide who can apply and who inherits: see our guide to dying without a will in the UK.

• List every asset and debt, including pensions, life policies and jointly held property, and note how each asset was owned.

• Ask about the 7-year gift history early, while paperwork and memories are fresh.

• Inventory the digital estate: online banking, crypto, domain names, photo libraries and social accounts. Our guide to digital assets in a will explains what executors can and cannot lawfully access.

• Decide the route: excepted estate declared in the probate application, or full IHT400 to HMRC.

• Diarise the two deadlines that bite: tax by the end of the sixth month after death, and no probate application until 20 working days after IHT400.

• Keep every valuation, statement and calculation. Executors are personally liable for getting the tax right, and records are the defence.

The part HMRC cannot value

Work through an IHT400 and you will notice something. HMRC can put a precise figure on a house, a pension and a share portfolio, but the estate return has no box for the things families actually reach for afterwards: a voice, a laugh, the story of how your parents met. Executors routinely report that the hardest moment is not the paperwork but discovering how much was never written down.

That gap is fixable, but only in advance, and only by the person themselves. If sorting an estate has prompted you to organise your own affairs, start with the legal layer: our guide to making a will in the UK covers what a solicitor needs from you. Then consider the human layer. With Afterlife AI™ you can record your life story in your own voice and build a Persona from your memories, so your family legacy is more than a schedule of assets. Executor Lock™ then seals your decisions about who can reach your Persona, on terms you set while you are alive. Plans and the free build are on the pricing page.

HMRC's process exists so that value passes on properly. What passes on beyond value is up to you, and it is the one part of the estate that cannot be assembled after the fact.

Sources

• GOV.UK: How Inheritance Tax works: thresholds, rules and allowances

• GOV.UK: Valuing the estate of someone who died, including checking the type of estate

• GOV.UK: Inheritance Tax account (IHT400)

• GOV.UK: Pay your Inheritance Tax bill, including reference numbers and the Direct Payment Scheme

• GOV.UK: Inheritance Tax: residence nil rate band

• GOV.UK: Applying for probate

• GOV.UK: Direct Payment Scheme bank or building society account (IHT423)

• GOV.UK: Apply for an Inheritance Tax reference (IHT422)

This page is general information, not legal or tax advice. Probate procedure differs in Scotland and Northern Ireland, thresholds and HMRC processes change over time, and estates vary enormously. For your own situation, speak to a solicitor or a tax adviser.