Inheritance tax receipts reached £936m in September, the highest monthly total on record, according to reporting on HMRC’s latest figures. The increase renews attention on a familiar private-client problem: an estate can contain valuable property while having comparatively little cash available to meet its obligations.
September’s total compares with £671m in the same month last year. Receipts for April to September 2026 were approximately £4.72bn, against £4.39bn in the corresponding period of 2025.
The figures, released on 21 October, describe money collected. They do not establish how many families needed to borrow, how many properties were sold or whether September’s pace will continue. HMRC also identifies the current financial year’s cash-receipts data as provisional.
For executors and beneficiaries, the more useful discussion concerns their own timetable. What must be paid, when can estate money be accessed, and what happens if a property sale or transfer takes longer than expected?
A Record Month Does Not Explain an Individual Estate’s Liability
Frozen thresholds and rising asset values form part of the background to increasing receipts. Payment timing also matters when interpreting monthly collections. A single record should not be converted into a forecast of what every estate will face.
Nor can an inheritance tax bill be calculated simply by applying a headline rate to the market value of a property portfolio. Ownership, debts, exemptions, reliefs, previous gifts and the terms of the inheritance may all require specialist assessment.
The finance conversation should therefore begin with the solicitor’s and tax adviser’s work. An estimate of the liability is useful, but so is a schedule showing which amounts fall due at which points.
That distinction can prevent a family from borrowing more than it needs, arranging finance too early or assuming that a future sale will produce cash before it is legally and practically possible.
The Payment Timetable Can Precede the Distribution
HMRC’s general guidance says inheritance tax is due by the end of the sixth month after death, with interest charged on late payment. Usually, a payment towards the liability is needed before a grant of representation can be obtained.
The timetable for beneficiaries receiving property or cash may be different. The estate’s advisers need to reconcile those dates and establish any applicable payment arrangements.
The Cash Gap Needs Calculating Before the Loan
Consider a hypothetical estate containing £4m of property, £800,000 of existing mortgages and £150,000 of cash that its advisers confirm is accessible for estate payments.
Assume the professional advisers identify £650,000 of tax and administration payments to fund over a specified period. This is a cash-planning assumption, not an inheritance tax calculation for a £4m estate.
Before taking account of rent, asset sales or any eligible instalment arrangement, the difference between those payments and available cash is £500,000.
| Item | Illustrative amount | Meaning for the review |
|---|---|---|
| Property value | £4,000,000 | Value held in assets, subject to valuation and ownership checks |
| Existing property debt | £800,000 | Existing lenders’ security and repayment requirements need reviewing |
| Property equity before costs | £3,200,000 | Does not establish available cash or new borrowing capacity |
| Accessible cash assumed | £150,000 | Available towards the identified payments |
| Payments assumed over the review period | £650,000 | Timing and liability must be confirmed by professional advisers |
| Initial cash gap | £500,000 | Before other receipts or changes to the payment schedule |
The estate appears substantial, yet the payment gap is real under these assumptions. It does not follow that a £500,000 mortgage is the correct answer. The first task is to establish whether the gap can be reduced or spread without new borrowing.
The review should also allow for insurance, repairs, professional fees and ongoing mortgage payments. Using every available pound for one liability could leave the estate unable to maintain the properties while administration continues.
Check Available Estate Funds and Instalments First
Cash in the deceased’s accounts may be relevant even before the wider estate can be distributed. HMRC’s Direct Payment Scheme allows participating banks, building societies and certain investment providers to transfer money from the deceased’s accounts directly towards inheritance tax, subject to the process and available funds.
The executor should establish what each institution can release and when. A family should not assume that all money is inaccessible until probate, or that every provider follows the same procedure.
For qualifying assets, HMRC permits the attributable tax to be paid in ten annual instalments. Interest usually applies, the first instalment has its own due date, and selling the relevant asset generally requires the outstanding tax to be paid.
An instalment arrangement spreads a liability; it does not eliminate it. The estate still needs a credible source of cash for the future payments, and the advisers must identify which portion of the liability qualifies.
Comparing these options can materially change the amount of external finance required. The comparison should use the actual tax-payment terms, borrowing costs and expected receipts rather than assume a bank loan will be cheaper or easier.
Assessing Finance Around Inherited Property?
Willow can examine the property and borrowing options alongside the estate’s solicitor and tax adviser, using a confirmed cash requirement and a clear ownership plan.
Explore Complex Property Finance →Establish Who Can Borrow and Grant Security
An expected inheritance does not give a beneficiary unrestricted control over an estate asset. Before a lender can assess a secured loan properly, the solicitor needs to establish who owns the property and who has authority to act.
Borrowing by personal representatives during administration is different from a beneficiary obtaining a mortgage as part of, or after, a legally effective transfer. The available route may depend on the grant, the will, the jurisdiction, existing security and the lender’s requirements.
This is why property value alone cannot demonstrate that finance will be available quickly. A lender may be comfortable with the asset but unable to proceed at the current stage of administration.
The distinction also matters where the deceased owned shares in a property company. In that situation, the company may own the buildings while the estate owns the shares. Company assets should not be treated as the estate’s cash or security without proper legal and tax analysis.
Trust property raises its own questions about trustees’ powers and duties. Executors, trustees, beneficiaries and company directors should not be treated as interchangeable borrowers.
Temporary Borrowing Needs a Realistic Repayment Event
Where suitable borrowing is available, a short-term facility may provide time for an identified sale or other receipt. Its suitability depends heavily on what will repay it and whether that event can happen within the agreed term.
A proposed sale should be assessed using realistic marketing time, a defensible price and net proceeds after existing debt and transaction costs. A property’s headline valuation is not the amount that will reach the estate’s bank account.
For illustration, suppose a £500,000 loan costs 0.8% a month in simple interest. Twelve months would produce £48,000 of interest before fees. If interest were retained from the facility, the usable advance could be materially below the stated loan amount.
This is a hypothetical cost example, not a quotation or an indication that such finance is available. It demonstrates why the review must distinguish the gross facility, the cash received and the total repayment.
A delayed sale can increase costs and create pressure near the repayment date. The family needs to understand that outcome before taking a loan intended to avoid an immediate disposal.
Borrowing Creates Liquidity, Not a Tax Saving
A loan can provide cash for a payment, but it also creates debt, interest and potentially fees. No reduction in inheritance tax should be assumed merely because borrowing is introduced.
The tax adviser establishes the liability and any relevant tax treatment. The finance assessment establishes whether the proposed debt is available, affordable and appropriate.
Retaining a Rental Portfolio Requires a Longer-Term Assessment
Some beneficiaries may want to continue letting inherited properties rather than sell them. That can create a refinancing requirement, but the assessment should reflect the portfolio they will actually own and manage.
Existing mortgages need reviewing with the lenders. The estate and beneficiaries should not assume that the original borrower’s arrangements can simply continue unchanged after death or transfer.
A new lender will need to assess the proposed borrower, property, rental income and financing structure. Rent that appears comfortable against the current mortgage may not support a larger replacement loan.
Management costs, maintenance, void periods and tax also affect the cash available to the new owner. A portfolio’s gross rent should not be treated as money freely available for both mortgage payments and family distributions.
If only some properties will be retained, examine the effect of selling the others. A disposal can reduce debt and produce liquidity while also removing income. Those consequences belong in the same forecast.
A Beneficiary Buyout Is a Different Financing Requirement
Estate liquidity and a later family buyout can occur around the same property, but they answer different needs.
Suppose two siblings become equal owners of an unencumbered property valued at £1.2m after administration. One wishes to retain it and the other wants cash. A £600,000 mortgage would represent 50% of the value and could, in principle, fund the other sibling’s share.
That calculation does not establish approval. If the retaining sibling will live there, the proposed residential borrowing needs an appropriate affordability assessment. If the property will be let, the rental and borrower requirements may be different.
The legal transfer, agreed valuation and any transaction taxes also need advice. The family should establish the full cost before deciding that a mortgage provides a straightforward settlement.
Finance may help relatives achieve different objectives, but it cannot replace agreement about ownership, value and responsibilities.
The Useful Starting Point Is One Coordinated Plan
For probate solicitors, accountants and families, the practical opportunity is to bring the legal timetable, tax payments and property decisions together early enough to compare the available routes.
The review should identify the immediate cash requirement, accessible funds, existing secured debts, property occupation and intended disposals or distributions. It should also distinguish confirmed decisions from assumptions that still depend on consent, valuation or approval.
Willow can assess the borrowing element once those foundations are clear, including whether refinancing, a beneficiary mortgage or suitable temporary finance warrants consideration. The recommendation may also be that borrowing adds cost without solving the underlying problem.
Record tax receipts provide the news context. For an individual estate, the important outcome is a workable plan that meets its obligations and gives the family a clear understanding of what retaining or selling the property will involve.
Frequently Asked Questions
Estate cash requirements, inherited property and the role of borrowing.
Does an estate have to sell property to pay inheritance tax?
Not necessarily. Available estate funds, qualifying instalment arrangements, asset sales and suitable borrowing may need comparing. The executors and their professional advisers should establish the liability, timing and legal options first.
Can inheritance tax on property be paid in instalments?
Tax attributable to qualifying assets can be paid over ten annual instalments. Interest usually applies, and sale of the relevant asset generally brings the remaining tax into payment. Eligibility must be confirmed for the estate.
Can a beneficiary mortgage a property before inheriting its legal title?
An expected inheritance does not by itself give a beneficiary authority to grant security. The solicitor must establish ownership, the stage of administration and who can borrow or charge the property before a financing route is assessed.
Is borrowing to fund an estate liability an inheritance tax saving?
No tax saving should be assumed. Borrowing provides cash and creates debt, interest and potentially fees. Any tax treatment must be established separately by the estate’s tax adviser.
What does Willow need to assess inherited property finance?
The starting information includes the solicitor-confirmed ownership and authority to act, property values, existing mortgages, occupancy, rental income, the amount and timing of the cash requirement, and the intended repayment or long-term ownership plan.