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ACCA Strategic Professional · Advanced Taxation (UK) · Inheritance tax: administration and payment, including the instalment option

Mr Patel died on 1 March 2027 owning a house worth £400,000 and other assets. His executors want to obtain the grant of representation. Which statement about paying the inheritance tax (IHT) due on his death estate is correct?

IHT on a death estate normally has to be paid before the grant of representation is issued, although tax on qualifying assets like land can be paid by ten annual instalments. Executors therefore often need funds early, and the six-month date only affects when interest begins.

  1. AIHT on the estate must normally be paid before the grant is issued, although tax on qualifying assets such as land can be paid by instalmentsCorrect
  2. BIHT on the estate is never due until six months after death, whatever the assets
  3. CIHT on the estate can only be paid after the grant has been obtained, with no payment beforehand
  4. DIHT on the estate is payable by the beneficiaries only, never by the executors

Explanation

Executors usually need to pay the IHT that is due before the grant is issued, which creates a funding problem when the estate is mostly illiquid. The instalment option exists for qualifying assets such as land and buildings. The tax is not postponed automatically to six months, which is only the date from which interest runs.

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