The PRs are also responsible for finding out whether or not inheritance tax (IHT) is due upon the death of a person. If so, it is down to the PRs to make sure that it’s paid to HM Revenue and Customs.
Whether IHT needs to be paid may depend on:
- The value of the property and belongings owned by the person when they died.
- The value of certain trusts which the dead person benefitted from.
- The value of any gifts that they gave before they died, and who these gifts were given to.
- Which people are due to benefit by the Will or intestacy rules e.g. gifts passing to the deceased person’s spouse or to charity will be exempt from IHT
Inheritance tax is payable when the grant of probate is applied for, but funds from the estate can’t always be used for this purpose because all the assets are frozen at the date of death.
Some banks and building societies will release funds just to pay IHT, but if this isn’t possible or the available cash is insufficient, it may be necessary for the PRs to arrange a short-term loan from the deceased person’s bank to cover the IHT figure.