IHTM05120 - Grants on credit: introduction and statutory background

The law requires Personal Representatives (PRs) (IHTM05012) to pay all or part of the Inheritance Tax (IHT) due on the deceased’s estate before they can obtain a grant.

IHTA84/S226 (2) states that all PRs who are liable for the tax by reason of IHTA84/S200 (1)(a) 'shall, on delivery of their account pay all the tax for which they are liable'. The guidance at IHTM30172 explains how to work out the amount that needs to be paid on delivery. 

The Senior Court Act 1981/S109 requires that an account (IHTM10011) shows that:

• the Inheritance Tax (IHT) payable on delivery of the account has been paid, or
• no such tax is payable,

before a grant can be issued or resealed in the UK.

In certain circumstances (IHTM05123), HMRC will allow a PR to postpone payment of all or part of the tax and interest due on delivery of an account. This is referred to as a grant on credit.

It is important to note that late payment interest will accrue as usual on any unpaid tax.