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You can make a payment on account with HM Revenue & Customs (HMRC) at any time - even if you don't yet know how much Inheritance Tax is due and you aren't ready to apply for a grant of probate (or confirmation in Scotland). It may also earn you interest.
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If the financial affairs of the estate are complicated, you might find it difficult to work out how much Inheritance Tax is due by the six-month payment deadline. Paying Inheritance Tax after the 'due date' means you might have to pay interest on the amount outstanding.
If you pay a lump sum in advance, HMRC won't charge you interest on the amount you've paid. If that amount is less than the eventual amount due, you'll only have to pay interest on the balance outstanding.
When and how interest is charged on Inheritance Tax
How to calculate interest on payments of Inheritance Tax
To make a payment on account, you must first get an Inheritance Tax
reference number and payslip.
How to pay Inheritance Tax on account with HMRC
If you pay too much money in advance, HMRC will refund any excess money to you after you get the grant of probate (or confirmation in Scotland).
HMRC will also pay interest on the amount you've overpaid at 1 per cent below Bank of England base rate, although there will be a minimum repayment rate of 0.5 per cent.
Check interest rates for Inheritance Tax
