In this section:
Paying Inheritance Tax from the deceased's bank account
If there’s enough money in the deceased’s bank or building society accounts to pay the Inheritance Tax due, you may be able to use the Direct Payment Scheme to transfer the payment direct from the deceased’s account to HM Revenue & Customs (HMRC).
On this page:
- How does the Direct Payment Scheme work?
- What does it cost?
- How do I arrange a Direct Payment?
- More help?
- More useful links
How does the Direct Payment Scheme work?
Not all banks and building societies take part in the scheme, so check with them first. Also, you can only use the Direct Payment Scheme if the accounts are in the sole name of the person who died. You can’t use it with joint accounts.
You may also find that if the person who died had more than one account and there is an overdraft on one of them, the bank may want this to be repaid before making a transfer.
Bear in mind the due date for paying Inheritance Tax, including the fact that you’ll have to pay interest to HMRC on payments received after the due date.
Find out how interest is charged on Inheritance Tax paid after the due date
What does it cost?
You should ask the bank or building society if they will charge a fee for making the transfer. Keep in mind that withdrawing funds from the deceased’s account will make it subject to whatever banking rules normally apply. For example, there may be a fee to pay on loss of interest if the account normally requires a notice period before making a withdrawal.
How do I arrange a Direct Payment?
You should get in touch with the bank or building society as soon as possible to find out if they take part in the Direct Payment Scheme, and what they need from you in order to arrange the transfer. You’ll also need to prove that you'll be the executor or personal representative of the deceased's estate.
It can take up to four weeks for the money to be transferred to HMRC, so this is not the best method to use if the grant of probate (or confirmation in Scotland) is needed urgently.
How to pay Inheritance Tax using the Direct Payment Scheme
More help?
Contact the Probate and Inheritance Tax Helpline
More useful links
Ways to fund an Inheritance Tax payment
