Inheritance Tax (IHT) Loan

 

Are you an executor faced with an unexpected Inheritance Tax bill?

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An IHT Loan helps personal representatives, or executors if there’s a Will, with estates where there is an Inheritance Tax (IHT) liability to pay but no funds available. It is the ideal solution if you are wondering how to pay inheritance tax before probate is granted.

IHT Loan key benefits

 

  • No risk or personal liability
  • No credit checks
  • No charge over property
  • No requirement for a Will
  • No monthly repayments

How does an IHT loan work?

When you apply for an IHT loan with us, we will pay HMRC the inheritance tax (IHT) owed. Once the IHT has been paid, an application can be made for Grant of Probate. Following the Probate process, the assets of the estate will be made accessible for disposal, allowing the IHT loan to be paid back from these funds. As the estate will refund the money for the IHT bridging loan, there will be no monthly repayments and no financial risk to you.

Who is an IHT loan aimed at?

An IHT loan can provide financial relief to executors (or personal representatives where there is no Will) who are facing a hefty inheritance tax bill. Taking out an executors’ loan to pay IHT will not only benefit you as the executor/personal representative, but it will also allow any beneficiaries of the estate to receive their inheritance in a timely manner.

An IHT loan is available to anyone who needs to pay UK inheritance tax. Unlike a traditional bank loan, there are no credit checks and no monthly repayments, so your income and affordability does not need to be assessed. This means you can apply for a bridging loan to pay inheritance tax, regardless of whether you own a property or have a good credit rating.

The facts about Inheritance Tax Loans

  • Average bill is around £200,000
  • Estimated that £2bn a year is tied up in ‘locked estates’
  • Around 25,000-30,000 Estates incur IHT in any year
  • IHT has to be paid before you can get a Grant of Probate

What can inheritance tax loan be used for?​

If you need help settling an IHT bill, it can be expensive and time consuming to arrange the funding. Until you have settled the IHT, you can’t obtain the Grant of Probate and the estate cannot progress through to distribution. This creates “locked” estates which cannot move forward until the IHT has been settled.

An Inheritance Tax Loan can be used to ensure your estate does not become locked by enabling you to settle the IHT bill quickly and easily. This ensures that you avoid any delay or penalty charges from the HMRC.

How does an IHT loan work?

When you apply for an IHT loan with us, we will pay HMRC the inheritance tax (IHT) owed. Once the IHT has been paid, an application can be made for Grant of Probate. Following the Probate process, the assets of the estate will be made accessible for disposal, allowing the IHT loan to be paid back from these funds. As the estate will refund the money for the IHT bridging loan, there will be no monthly repayments and no financial risk to you.

Who is an IHT loan aimed at?

An IHT loan can provide financial relief to executors (or personal representatives where there is no Will) who are facing a hefty inheritance tax bill. Taking out an executors’ loan to pay IHT will not only benefit you as the executor/personal representative, but it will also allow any beneficiaries of the estate to receive their inheritance in a timely manner.

An IHT loan is available to anyone who needs to pay UK inheritance tax. Unlike a traditional bank loan, there are no credit checks and no monthly repayments, so your income and affordability does not need to be assessed. This means you can apply for a bridging loan to pay inheritance tax, regardless of whether you own a property or have a good credit rating.

The facts about Inheritance Tax Loans

  • Average bill is around £200,000
  • Estimated that £2bn a year is tied up in ‘locked estates’
  • Around 25,000-30,000 Estates incur IHT in any year
  • IHT has to be paid before you can get a Grant of Probate

How can I get a loan to pay Inheritance Tax?

Application
Short online form or speak to our team if you prefer

Request estate information from solicitor/probate administrator

Complete paperwork
We pay HMRC
Estate pays the refunding

Why choose Tower Street Finance?

Here are just a few reasons to choose Tower Street Finance for IHT loans:

  • We are fully regulated and authorised by the Financial Conduct Authority.
  • Our management team has more than 100 years’ combined experience in financial services, credit management and risk.
  • We are passionate about using data to provide a product and service that benefits you.
  • We have a rating of “Excellent” on the independent review site Trustpilot. See the direct quotes below from our customers who’ve benefitted from taking out an executor’s loan to pay IHT.

Hear from people who have benefitted from IHT Loans…

“It’s really frustrating. The estate has lots of assets, including money in bank accounts, but I can’t get access to them to pay the IHT. This product will really help.”

“I’m the executor of the Will but I’m not a beneficiary. The family are getting really frustrated about the amount of time it’s taking because of the funds needed to settle the tax bill before we can progress anything.”

“I wasn’t expecting a bill running into the tens of thousands when I agreed to be an executor for my friend’s Will. Everything was delayed while I had to take out a personal loan in my own name. I wish this had been available then.”

Inheritance Tax Loan FAQs

We understand you might want to know more about getting your inheritance tax loan. That is why we have put together some of these frequently asked questions to provide the information you need.

How much does Inheritance Tax loan cost?

If you are approved for an Inheritance Tax Loan, there is no origination fee, so no up-front costs. The only charge is the monthly interest for the duration of the loan. All this is added to the balance, and you can see a representative example below of how this would work in practice.

Can I get an Inheritance Tax Loan with a poor credit history?

Yes. Your credit rating is not related to your ability to take out an Inheritance Tax Loan. The loan is secured against the proceeds from the estate. The only thing we will check for when you apply is an undischarged bankruptcy.

How quickly will I receive my Inheritance Tax Loan?

As long as we have all the required information we can underwrite and provide the loan within 48 hours.

Get in touch about an inheritance tax loan

Our professional customer service team are here to help you with any queries you may have about IHT Loan. They can also take your application over the phone or you can apply online below.

Representative 19.6% APR

Representative example
If you took out an IHT loan of £50,000 (the total amount of credit) and the loan was repaid by a single payment out of the estate after 1 year, the total amount payable would be £59,781. This is made up of repayment of the loan and interest of £9,781. The annual interest rate is 19.6% fixed.

If there is no Will and no executor, the loan is also available to the person applying to be ‘personal representative’.

The IHT Loan product is a credit agreement which provides you with access to credit which must be used to pay the remaining IHT liability on the estate and is paid directly to HMRC. As the loan settles the remaining IHT liability, it will automatically be deemed a Testamentary Expense. The loan does not create a charge over any land or property. Access to the product does not rely on your personal credit rating and, other than in cases of fraud/breach of terms & conditions, repayment of the loan together with accrued interest, is made out of the estate proceeds. We assess the value of the estate to ensure that there will be sufficient proceeds to cover the loan plus accrued interest. Interest is only charged for the first 30 months of the loan. The estate must be administered to distribution by a recognised administrator.

The IHT Loan can also be used where a Trust Company is appointed as the professional executor/personal representative. In this instance the loan is not regulated by the CCA but all other terms are identical to the CCA-regulated IHT Loan.