IHT423

IHT423 Direct Payment Scheme: paying IHT before probate

Last checked 5 October 2026 against HMRC’s forms, guidance and the law · rules version 2026-10-05.1

Schedule IHT423 is a short form that asks the deceased's bank, building society, National Savings and Investments (NS&I), broker or investment manager to send money from a sole-name account straight to HM Revenue and Customs (HMRC) to pay Inheritance Tax before probate. You fill in one IHT423 for each account, send it to the bank or provider rather than to HMRC, and answer "Yes" at box 120 of the IHT400. You need an Inheritance Tax reference number first, and GOV.UK asks you to get it at least 3 weeks before you pay.

What the Direct Payment Scheme is

Probate is the court document, formally a "grant of representation", that lets the personal representatives deal with the deceased's money and property. Personal representatives are the executors named in a will, or the administrators where there is no will.

Most Inheritance Tax has to be paid before that grant is issued (IHTM30172). HMRC's IHT400 Notes, its guide to the form, recognise the difficulty: a grant "may be required in order to gain access to the assets in the deceased's estate", which can make it hard to raise the money for the tax.

The Direct Payment Scheme, available since 31 March 2003 (IHTM30184), is one answer. Under it, participating organisations "release funds from the deceased's accounts direct to HMRC to pay Inheritance Tax" (IHT400 Notes, box 120).

Which organisations take part

The IHT400 Notes and the current IHT423 (HMRC 11/24) cover:

banks and building societies
NS&I
brokers and investment management firms, which can be asked to sell all or part of the deceased's holdings and send the proceeds to HMRC (added on 1 October 2024)

Not every organisation takes part. GOV.UK says "some may not be part of the Direct Payment Scheme", and the IHT400 Notes suggest checking with each organisation that held the deceased's money "before going any further".

Pension and insurance providers

HMRC's Trusts and Estates Newsletter of April 2025 says references to pension and insurance providers were removed from the scheme's form and guidance. An earlier GOV.UK page (April 2024) says some providers of insurance and investment bonds "are prepared to release funds directly to HMRC", and suggests asking the company whether it will.

For deaths from 6 April 2027, a separate Pensions Direct Payment Scheme will apply to pension funds, explained in pensions and Inheritance Tax from April 2027.

Which accounts can be used

Sole name only. "The accounts in question must be in the deceased's sole name, so you cannot use joint accounts for this method of payment" (IHT400 Notes).
One form per account. The form asks for "a separate form for each account".
Joint accounts. A joint account cannot go through the scheme. GOV.UK does say you can pay from your own account, or from a joint account you held with the deceased, and claim the money back from the estate or the beneficiaries once you get probate.

Before you start: the Inheritance Tax reference number

Every IHT423 needs the estate's Inheritance Tax reference number. The form warns: "Your payment cannot be matched to your account without this."

You apply online through GOV.UK's IHT422 page, using sign-in details or an e-mail address. The IHT400 also mentions applying by post on Schedule IHT422. GOV.UK says to get the number "at least 3 weeks before you make a payment", and the same number goes in box 3 of the IHT400.

Using the scheme, step by step

Contact each organisation. Ask whether it takes part and how it will recognise you as personal representative. Each one does this differently. HMRC's notes say each organisation carries out its own checks and "will usually ask for the original death certificate". HMRC recommends doing this "well before you intend to apply for a grant".
Apply for the reference number, at least 3 weeks before you plan to pay.
Work out the tax to pay before probate. This is box 119 of the IHT400 (the simple calculation) or box 65 of the IHT400 Calculation. The total on all your IHT423 forms "should not exceed the total IHT liability" (IHT400 Notes).
Fill in one IHT423 for each account, using the table below.
Sign. "It's important that everyone who's applying for the grant of representation or confirmation to the estate signs this form." Page 4 has space for four people.
Answer "Yes" at box 120 of the IHT400. The wording of box 120 still mentions only banks, building societies and NS&I; the IHT423 itself also covers brokers and investment managers.
Send each IHT423 to the organisation that holds the account, not to HMRC, at the same time as you post the IHT400 to Inheritance Tax, HM Revenue and Customs, BX9 1HT.

The declaration on IHT423 begins "I have applied for a grant of representation". GOV.UK says the process can start before you have probate, and HMRC's notes say to send the IHT423 at the same time as the IHT400.

What each part of IHT423 asks for

Part of the form	What goes there
Top of page 1	Deceased's surname, first name, address, date of death and the Inheritance Tax reference number
Page 1, box 1	Name of the bank or building society (leave blank for NS&I)
Page 1, box 2	Sort code (leave blank for NS&I)
Page 1, box 3	Account number. For NS&I, the deceased's account number, "not their NS&I number or NS&I's general account number"
Page 1, box 4	Building society roll or reference number
Page 1, box 5	Amount to be transferred, in words and in figures
Page 2, boxes 1 to 3	Broker or investment manager accounts: the account name, the assets to sell (asset number, asset name, number of shareholdings to sell) and the amount
Page 3	HMRC's bank details, already printed
Page 4	Declaration, signed and dated by each person applying for the grant

Worked example

Suppose someone died on 17 January 2026 and the IHT400 shows £52,400 of Inheritance Tax to pay before probate. The tax is due by 31 July 2026, and interest runs on anything unpaid from 1 August 2026.

The executors apply for the reference number on 1 June 2026, so they plan no payment before 22 June 2026. The deceased had these accounts:

Account	Balance	Can it be used?	Amount on IHT423
Building society savings, sole name	£25,000	Yes	£25,000
NS&I account, sole name	£20,000	Yes	£20,000
Bank current account, sole name	£12,000	Yes	£7,400
Joint account with a daughter	£8,000	No, it is joint	–
Total			£52,400

On 26 June 2026 the executors post the IHT400 to HMRC and send three IHT423 forms, one to each organisation. The total on the forms equals the tax due, and £4,600 stays in the bank account.

Now suppose the building society and NS&I payments reach HMRC in July, but the bank's £7,400 does not arrive until 14 August 2026. Interest runs on that £7,400 from 1 August to 14 August, which is 14 days counting both ends:

£7,400 × 7.75% × 14 ÷ 366 = £21.93

The later payment also moves the probate code. HMRC usually sends it within 20 working days of receiving the IHT400 or the payment, whichever is later. Twenty working days after 14 August 2026, with the bank holiday on 31 August, is 14 September 2026.

Working on an IHT400 for an estate?

The free check asks a few questions about the estate and tells you whether an IHT400 is needed, which schedules apply and which documents to gather. No sign-up.

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Software to help you prepare your own IHT400. Not legal or tax advice. We do not apply for probate. Not affiliated with HMRC.

If an account does not hold enough

The scheme can pay "some or all" of the tax (GOV.UK). HMRC's code for probate confirms "you've paid enough tax", so any shortfall has to be paid another way. The routes GOV.UK describes are:

another sole-name account of the deceased, with its own IHT423
your own money, or a joint account you held with the deceased, reclaimed from the estate or the beneficiaries after probate
British government stock held by the deceased; GOV.UK says the transfer "could take up to 4 weeks" and advises against this route if you need probate quickly
if none of these is possible, a letter to HMRC asking to postpone some of the tax until after the grant, known as a "grant on credit"

Our guide to paying Inheritance Tax before probate covers each route.

How long it takes

HMRC's notes leave the timing to each organisation, which "will be able to tell you how long it should take them to make the transfer". Once HMRC is told of the payment, it links it to your IHT400.

Interest is charged on tax still unpaid from the first day of the seventh month after the month of death, whatever the reason for the delay. Inheritance Tax interest and late payment explains the arithmetic.

If too much is paid

If the scheme pays more than the final tax bill, HMRC returns the money to the organisation that sent it from the deceased's account. HMRC "will not issue the repayment to the estate until a grant has been obtained" (IHT400 Notes).

The IHT423 declaration also authorises HMRC to return money to the deceased's account, and says the money stays with HMRC until the tax is finalised. GOV.UK says HMRC pays interest on overpaid tax; the repayment rate has been 2.75% a year since 9 January 2026.

Common mistakes

Using a joint account. Only accounts in the deceased's sole name can be used.
Sending IHT423 to HMRC. It goes to the bank, building society, NS&I, broker or investment manager.
One form for several accounts. Each account needs its own IHT423.
A missing signature. Everyone applying for the grant signs page 4.
No reference number, or the wrong one. The payment cannot be matched without it.
Asking for more than the tax. The amount should not exceed the total liability.
Assuming every provider takes part. Check with each one, and note that pension and insurance providers are no longer named in the scheme.

What happens next

When HMRC has the IHT400 and enough tax, it sends a unique code. In England and Wales you need that code to apply for probate (GOV.UK).

After the grant, the executors can collect the rest of the estate and repay anyone who paid tax from their own funds. HMRC may still check the IHT400. GOV.UK says that if you have not heard from HMRC 14 weeks after submitting it, no further checks will be carried out. For the main form, see how to fill in the IHT400.

Common questions

Can a joint account be used with the Direct Payment Scheme?

No. HMRC’s IHT400 Notes say the accounts must be in the deceased’s sole name. GOV.UK says you can pay from a joint account you held with the deceased as your own payment and claim it back from the estate after probate.

Is form IHT423 sent to HMRC?

No. IHT423 goes to the bank, building society, NS&I, broker or investment manager that holds the account, at the same time as the IHT400 goes to HMRC. Each account needs its own IHT423.

Who has to sign IHT423?

Everyone who is applying for the grant of representation signs the declaration on page 4 of IHT423. There is space for four people.

Is an Inheritance Tax reference number needed before using IHT423?

Yes. Each IHT423 needs the estate’s Inheritance Tax reference number, and GOV.UK asks you to get it at least 3 weeks before you make a payment.

What if the deceased’s account does not hold enough to pay all the tax?

The scheme can pay some or all of the tax. Any shortfall has to be paid another way, for example from another sole-name account with its own IHT423, or from your own money, which can be reclaimed from the estate after probate.

Can pension or insurance providers pay through the Direct Payment Scheme?

HMRC’s April 2025 newsletter says references to pension and insurance providers were removed from the scheme’s form and guidance. For deaths from 6 April 2027, a separate Pensions Direct Payment Scheme will apply to pension funds.