Probate and inheritance tax: separating the two processes

Probate and inheritance tax are two different processes that are often confused. Probate is the legal right to deal with someone's property, money and possessions — their estate — after they die. Inheritance Tax is a separate tax on that estate, administered by HMRC. In England and Wales, the two run in a fixed order: the estate is valued for tax purposes first, and if the estate owes Inheritance Tax, the IHT400 return has to be delivered before a probate application can be made.

This page sets out what each process involves, how they interact, and where Scotland and Northern Ireland differ.

What probate actually is

Probate is a legal right, not a tax and not a payment. GOV.UK is explicit that you should not make any financial plans or put property on the market until you have probate.

The scope is England and Wales. Scotland and Northern Ireland have their own probate rules, and the guidance below does not apply to estates in those jurisdictions.

What Inheritance Tax is

Inheritance Tax is charged on the value of the estate of the person who died. Most estates are not taxed. Whether tax is due is worked out from the estimated value of the estate, and that estimate also affects how the value must be reported and the deadlines that apply for reporting and paying.

The order of work

Three questions have to be settled before a probate application, and they are separate from each other:

Is probate needed at all? Contact the financial organisations the deceased used — for example their bank and mortgage provider — to find out whether probate is required for access to the assets. Every organisation has its own rules.
Can you apply? If there is a will, the executors named in it can apply. If there is no will, the closest living relative can apply.
Is there Inheritance Tax to pay? This requires valuing the estate.

You can also search the probate records to check whether probate has already been issued.

Valuing the estate: the three tasks

HMRC frames the valuation work as three main tasks:

Step	What it covers
1. Identify assets and debts	Savings, investments, mortgages, loans
2. Estimate the estate's value	Determines how the value is reported and which deadlines apply
3. Report the value	Depends on whether you need to send full details of the estate and its value

This must be done before applying for probate, where probate is needed at all. Even where no tax is due, the estimated value of the estate is part of the probate application.

Where tax changes the sequence

If the estate owes Inheritance Tax, three additional rules apply:

You must report the value within one year, using form IHT400. You cannot apply for probate until you have done this.
You will normally have to start paying Inheritance Tax before probate is granted.
You must pay Inheritance Tax by the end of the sixth month after the person dies to avoid paying interest.

Each of these applies to an estate that owes Inheritance Tax. They are not uniform deadlines that apply to every estate.

Where probate may not be needed

Probate may not be necessary if the person who died:

only had savings
owned shares or money with others — this passes automatically to the surviving owners unless they have agreed otherwise
owned land or property as joint tenants with others — this passes automatically to the surviving owners

Once you have valued the estate and settled those checks, you can apply for probate online or by post.

Scotland and Northern Ireland

The probate guidance above is for England and Wales only. Scotland and Northern Ireland each run their own probate processes, and you should follow the official guidance for the jurisdiction where the property or assets sit rather than assuming the England and Wales route applies.