Who pays the inheritance tax, and when

Tax is due six months after the end of the month of death, and the grant of probate will not be issued until it is paid. That is the loop everyone discovers late: the money is in the estate, the estate cannot be opened without the grant, and the grant will not come without the tax.

There are ways through it. Banks will usually release funds directly to HMRC under the Direct Payment Scheme. Tax on a property can be paid in ten annual instalments, with interest.

The nil rate band is three hundred and twenty five thousand pounds, and a further one hundred and seventy five thousand may apply where a home passes to children or grandchildren. An unused band can often be transferred from a spouse who died first, which is why an estate under one million pounds frequently pays nothing.

The figure that matters is the one at the date of death. Not the estate agent's optimism, and not what the house eventually sold for.