Inheritance Tax Loans

If you inherit a property which is liable for inheritance tax, you will normally have to pay the tax bill to settle probate before you can sell the property. This can leave people in a difficult position if they do not have enough spare capital to cover the tax bill out of their own pocket.

For this reason, many people use a type of short term finance known as a bridging loan to pay the inheritance tax bill, resolving the probate issue so they can then sell the property they have inherited.

Using bridging finance for an inheritance tax loan

Bridging loans can often be arranged in just days and typically come with loan terms of anywhere from 1-18 months. This makes them ideal when you need a quick way to resolve your probate issues and facilitate the sale of an inherited property.

When you take out a bridging loan, you will need to specify your exit strategy i.e. how the loan will be repaid, which should be straightforward if the goal is to free a property from probate for sale.

To get bridging finance, you will usually need to apply through a loan broker as bridging loans are normally only offered by private and specialist lenders who work through intermediaries such as brokers.

Interest rates and inheritance tax loans

When a person dies, any inheritance tax due on their estate must be paid by the end of the sixth month after their date of death. So, if they pass away any time in January, the bill would be due by the 21st of July the same year. If their death occurs in February, the due date would be 31st August.

After this six month period, you will begin to be charged interest on the amount owed to HMRC. This cost should therefore be weighed against the cost of the interest on an inheritance tax loan when working out what is the best way to minimise the costs associated with your inheritance.

Compare inheritance tax loans

If you require a loan to cover your inheritance tax bill, our free bridging finance calculator offers a fast, fuss-free way to find the best deals on the money you need. All you have to do is share some basic information about your borrowing needs and financial situation and we will do the rest.

Looking for an inheritance tax loan? Get in touch with our friendly expert team of loan brokers using the contact form on the right or by calling 0117 313 6058.