Paying IHT

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The pension changes means more people will get pulled into the IHT threshold & on here a lot of people talk about their 1m plus homes.

Should the 6 month limit to pay free of interest be increased? Surely most can't pay it until a house is sold?

nobody?

6months to pay is ridiculous. There needs to be a longer interest free period. Bereavement is hard enough without iht case officers phoning you on a death anniversary because thats when the debt began. Bastards.

It’s utterly insane. Probate can take months before a house can even be sold. Disgraceful to hound the bereaved.

Yes, I was just thinking logistically about physically clearing out parents home, sorting the funeral, dealing with grief etc. It's a lot & no what would the house be sold in 6 months.

I have no problem paying IHT, but the 6 month clock shouldn’t start until after probate is granted imho. When my dad passed, it took 7 months just to get a death certificate!! (Due to the circumstances of his death and the government being obstructive)

You can't sell the house until the tax is paid and probate granted. If you can't pay you can pay in installments but that incurs interest. It's not user friendly!

If you are rich enough to go over the IHT threshold, you need to take out an insurance policy which will cover interest before probate is back.

@Unilaterallyinsane who takes this out? parents?

You can't sell the house until the tax is paid and probate granted. If you can't pay you can pay in installments but that incurs interest. It's not user friendly!

what happens if you can't afford the instalments?

I think you can get a loan, like a bridging loan, against the house

And no 6 months is not long. It should be a reasonable amount of time to allow the house to be sold

I see that the house can't be sold until the tax is paid, why is this.

YANBU. I’m massively in favour of IHT - and as it stands, my parents’ estate would owe it if they were to die tomorrow and I still think it should be considerably increased. But plenty of estates aren’t cash rich, and there shouldn’t be a penalty for things like selling a house taking time. Especially since we have such a bloody awful house buying/selling process in this country.

I think you'll get little sympathy tbh. If an estate is large enough for IHT, then it's over 1 mil.

And (if I remember correctly), the first mil is not taxed, only the amount over. So yes, while I imagine it's a pain or difficult to pay it up front, it's on the basis you're about to get significant assets.

I see that the house can't be sold until the tax is paid, why is this.

I've only just learnt this from this thread!

To ensure the tax is paid, I imagine.

I think you'll get little sympathy tbh. If an estate is large enough for IHT, then it's over 1 mil.

Not if you're a single parent...

So yes, while I imagine it's a pain or difficult to pay it up front, it's on the basis you're about to get significant assets.

But my point is where do people potentially find hundreds of thousands of pounds before they inherit anything?

There are specific loans / companies that do these.

And yes, a single person would only get 500k allowance.

I don't have an objection to paying the tax just think a 6 months timeframe and having to pay interest/take on debt is harsh.

Just regard the interest as an extra tax then if you have no problem paying the tax.

It can also be paid via DPS where cash assets of the deceased can be released directly to HMRC prior to probate. Even if it's just enough for a part payment it can reduce the interest due overall.

I don't think it's really had much priority to change, but maybe as more families fall into it, it will be reviewed.

The person leaving the money, whoever that is. Anyone with all that money would be advised to take out insurance by a FA.

Just regard the interest as an extra tax then if you have no problem paying the tax.

I don't like the idea of getting into debt to pay extra tax.

I wouldn't worry about it and just organise a loan to pay it, I imagine it's quite usual to do this.