Direct payment scheme for IHT extended to investment providers

The direct payment scheme which allows personal representatives (PRs) to pay IHT from the deceased’s funds has been extended to investment providers.

For many years HMRC have operated a direct payment scheme which allows PRs to instruct banks building societies or National Savings & Investments to transfer funds directly to HMRC for the purposes of paying IHT. This is done using form IHT423. This means that the PRs can access funds from the deceased’s estate to pay IHT before they receive the grant of probate.

The scheme has been extended to investment providers and form IHT423 redesigned. Personal representatives can now use the revised form to ask brokers investment management firms and pension or life insurance providers to sell shares or assets and release funds from the deceased’s investment accounts to pay directly to HMRC.

Participation in the scheme is voluntary and not all investment providers choose to take part. Personal...