Should I apply for probate myself if Inheritance Tax is payable?
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Should I apply for probate myself if Inheritance Tax is payable?
Ian Winterbotham answers questions on how Inheritance Tax works when applying for probate. This episode follows on from the previous podcast, What is the Role of an Executor and a Trustee?
Why is this an important area to cover?
This really relates to Trust Wills. If a Trust is created in a Will, it’s very difficult for a lay person to really know how to interpret the Will and execute the Probate.
I wanted to make the point that if you’re writing a Will that creates a Trust, it’s often a good idea to produce a Letter of Wishes, explaining to your executors how you want them to administer the Trust.
Often Trusts become discretionary at some stage, so the Trustees can choose whether to keep money in the Trust, appoint it out, lend it or invest it. The Letter of Wishes is useful, because if a lay person goes to a firm of solicitors for advice, they will suggest a long list of options.
Then, you go down the line of Inheritance Tax planning – but perhaps that wasn’t the intention of the Will in the first place. The intention might be to protect assets for the bloodline and not to disadvantage the surviving spouse, who’s made a similar Will. They’ve done all this planning to make sure their children and grandchildren don’t get disinherited.
With Trusts in a Will, it’s a good idea to go back to the professionals who wrote the Will in the first place.
Should I apply for probate myself if Inheritance Tax is payable?
Yes, if you’re capable of doing all the necessary tasks, have the mindset and time available, you can, absolutely. But you must be prepared to take on the responsibility and challenge.
How complicated is an estate from an Inheritance Tax perspective?
You might consider applying yourself if the estate is straightforward, you’re comfortable with the paperwork and deadlines, and you’ve reviewed HMRC’s guidance and understand the IHT forms.
When there’s Inheritance Tax to pay, you need to to estimate the estate’s value, reporting it to HMRC before applying for probate, and that includes completing forms like the IHT 400. In the past you would have received confirmation from HMRC via another form called the IHT 421 – but now they give you a code to say they’ve gone through the application, the statement of assets and liabilities, and have calculated the Inheritance Tax.
The code allows you to make the application for the Grant of Probate. Payment is usually required towards the Inheritance Tax before probate is granted.
What forms will I need to complete for probate? How complex are they?
The IHT 400 leads you on to the IHT 401, 402, 403, 404 and so on, depending on what assets are in the estate. If you have foreign assets as well, there’s a whole new range of challenges for you.
How do I correctly calculate the Inheritance Tax due, including allowances and reliefs?
You need to build up a spreadsheet of assets and liabilities, and then calculate the net value of the gross estate.
You will need to apply available allowances (like the Nil Rate Band and Residence Nil Rate Band), and then calculate tax at 40% on the taxable portion.
Here’s a step-by-step breakdown to help you do it accurately:
- Calculate the total estate value. Include all assets: property, savings, investments, possessions, and gifts made in the last 7 years.
- Deduct liabilities: outstanding debts, funeral costs, and legal fees.
- Apply the Nil Rate Band (NRB): £325,000 is tax-free for most estates. If unused NRB from a spouse or civil partner is available, it can be transferred, potentially doubling the allowance to £650,000.
- Apply the Residence Nil Rate Band (RNRB). If a main residence is passed to direct descendants (children or grandchildren), you may claim an additional £175,000 allowance. Like NRB, RNRB is transferable between spouses.
- Subtract allowances from the estate value. Example: If the estate is worth £900,000 and qualifies for full NRB (£325,000) and RNRB (£175,000), the taxable estate is: £900,000 − £325,000 − £175,000 = £400,000.
- Apply the IHT rate. Standard rate is 40% on the taxable portion. In the example above: 40% × £400,000 = £160,000 IHT due.
Reliefs that can reduce IHT:
- Spouse or civil partner exemption: Transfers between spouses are tax-free.
- Charity exemption: Gifts to charities are exempt.
- Business Relief: Up to 100% relief on qualifying business assets.
- Agricultural Relief: Up to 100% relief on qualifying farmland and buildings.
I’ve written it down as a checklist, but it’s not exhaustive. It’s something to look at when the time comes.
Do I have to pay some or all of the tax before probate is granted? How can this be arranged if funds are tied up in property?
It can be a bit frightening for an executor to think that they’ve got to pay all the tax upfront if there is not enough cash in the building society.
If there are investments, as well, you can usually apply to the investment provider to pay the tax directly to HMRC. Sometimes there’s very little cash and it’s nearly all property – which is not unusual within the M25 radius, where you could have a £1 million house and only £10,000 in the bank.
The beneficiaries may be asked to pay the tax before they can get their inheritance, but in practice they would only need to pay the 40% on the cash in the bank accounts, and 10% of the tax due, so that’s only 4% of the tax due on the property.
This can be paid in instalments. The first one is calculated from six months after the person has died.
Speak To an Expert
Our service is designed to give you peace of mind that all the legal formalities have been completed and HMRC is satisfied at every stage. Our clients rely on us for the expert advice on trusts commonly found in wills and how to minimise inheritance tax on the estate. This can often be miscalculated if you try and do it yourself.
What are the risks if I make a mistake on the IHT forms or underpay tax?
I’ve seen this happen. The most common thing is to think you’ve done everything correctly and distributed all the assets, but maybe there was a charitable gift or other exemptions.
You may have actually paid out more than you should have. You’re trying to gather the money back to give to the charities from people who don’t want to give the money back. As an executor, you may have to make up the shortfall – so that is a risk.
How long does it usually take to get Grant of Probate when IHT is payable?
Before Covid, we might have said eight to 10 weeks. But post-pandemic, it went right up to eight to 10 months. Today, as we speak in October 2025, it’s four to six months if there are no requisitions or other delays.
Can I apply for probate myself, but get professional help just for the IHT calculations and forms?
Yes. People do that – but this hybrid approach is not something we would consider. We work with a specialist firm of Probate solicitors whose department just deals with Probate. They tell us that their professional indemnity insurance will not cover them in these circumstances.
They don’t want to take responsibility for an application that a layperson has done. It’s a bit of a tricky one that can cause problems.
What are the fees for handling IHT and probate? How do they compare to me doing it myself?
If you do it yourself, you can save a lot of money, but you’re taking on the risks that we described before. It’s a challenge and a project that’s not everybody’s cup of tea.
If you ask us to do all the work as administrators and take those risks away from you, our fees are 1.5% of the gross estate, plus VAT, plus disbursements. Those are third party fees like the application fee that the Probate registry charges.
It might be the case that one person has died and they’ve left a Trust Will, and the gross estate consists of one half of the property, half of the joint assets and all the sole assets in that person’s name. Like other companies, we will be happy to negotiate a fixed fee if this is preferable.
Are there any ways to claim back overpaid IHT if property values change later?
There is a process, and this can seem easy if you know how and you’ve done it before, but quite challenging if it’s all new to you. That’s why it often gets overlooked.
If the property later sells for less, you may be eligible for a refund – but the property must have been sold within four years of the date of death. The sale price must also be lower than the value declared for Inheritance Tax in those forms.
Of course, the property needs to have been included in the IHT calculation and tax paid on it. You then have to consider the gains and losses on other investments or other capital elements.
The process for claiming it is to use Form IHT38. You need to submit the supporting sale details, original valuation and evidence of the reduced sale price. It can save a bit of money.
Would you recommend I do this myself or go through a probate service?
I do sometimes recommend people do it themselves. You’ve got to be suited to doing paperwork and taking on a challenge. If it’s a simple estate – just a property, a cash account and a few investments – you can get it done quicker yourself.
The majority of our clients are trying to protect assets for their children, grandchildren and the bloodline. Where the Wills create Trusts I often see people who’ve got themselves into quite a pickle.
A little knowledge is a dangerous thing. If one doesn’t do it correctly, that’s going to cause knock-on effects in the years to come.
It can be good to know everything is definitely done correctly. Certainly, if there’s Inheritance Tax to pay, you don’t want to miss out on allowances you could have claimed. These aren’t claimable after a couple of years – so that’s when to come to a professional. Making sure you claim these extra Inheritance Tax allowances will pay for the cost of any fees many times over.
Key Takeaways:
- Applying for Probate yourself is possible if you are capable, have the time, and the estate is straightforward, especially if you understand HMRC guidance and IHT forms.
- If a Will creates a Trust, it is often advisable to consult the professionals who drafted the Will, as interpreting and executing Probate can be complex for a layperson.
- Calculating Inheritance Tax involves valuing the estate, deducting liabilities, and applying allowances like the Nil Rate Band (£325,000) and Residence Nil Rate Band (£175,000), with the standard tax rate being 40% on the taxable portion.
- Inheritance Tax payment is usually required before Probate is granted, and while beneficiaries may be asked to pay, options exist for paying in instalments or directly from investments.
- Making mistakes on IHT forms or underpaying tax can lead to significant risks for the executor, including having to cover shortfalls. Professional help can ensure accuracy and help claim all available allowances.