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How to use IHT423 to pay Inheritance Tax direct from the deceased's bank account

IHT423 solves the estate administration catch-22: you can't get probate without paying IHT, but you can't access the estate's money without probate.

The Direct Payment Scheme lets the deceased's bank pay HMRC directly — no probate needed.

This walkthrough explains how to use IHT423, which banks participate, how to handle estates where the funds are spread across multiple accounts, and how to deal with the gap if the bank balances are less than the IHT due.

✓ Official source checked 24 September 2026 · GOV.UK last revised this form 24 February 2025IHT423 on GOV.UK
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United KingdomInformational, not legal or financial adviceOfficial source: GOV.UK
Official form · always current

This is the same official IHT423 file HMRC publishes on GOV.UK — the link below fetches the current version live from GOV.UK the moment you click it, so it can never go out of date.

Current version: February 2025 · confirmed on GOV.UK 24 September 2026

This walkthrough takes IHT423 field by field, in plain English. The form itself is short; the hard part is the catch-22 it solves — you can't get probate until Inheritance Tax is paid, but you can't reach the deceased's money to pay it until probate is granted. IHT423 is the release valve: it lets the bank pay HMRC directly, before the grant.

Send it to the bank, never to HMRC
The commonest mistake is sending IHT423 to HMRC instead of to the bank.

The form goes to the financial institution holding the funds — the bank then settles with HMRC directly. Sending it to HMRC causes a significant delay.

The second trap is the balance: a bank will only pay up to the amount in the deceased's account on the day it receives the form, so if one account can't cover the bill you'll need a separate IHT423 for each account or institution.
The form, in summary

The IHT423 form, in summary.

Valoren
IHT4232 pages18 fields guided
With Valoren10 minutes
Without Valoren20 minutes
to complete; allow 3–6 weeks total for reference to arrive + bank to process payment + HMRC to acknowledge
Deadline
6 monthsfrom end of month
of death (IHT due)
Who Files
Executorsends form to
the bank (not HMRC)
£
Fee
Freebank pays HMRC
directly
Filed with The bank
Legal basisStatute

The Inheritance Tax payment catch-22: probate cannot be granted without confirming IHT has been paid (or none is due), but executors cannot access the deceased's bank accounts to pay IHT until probate is granted.

The Direct Payment Scheme resolves this deadlock by allowing participating banks and NS&I to pay HMRC directly from the deceased's accounts before probate — at the executor's direction.

The bank then confirms the payment to HMRC and, after probate is granted, the amount paid is treated as a payment on account from the estate.

Section by section

The form, section by section.

At a glance

IHT423 — Direct Payment Scheme (pay IHT from the estate's bank)

Who files
Executor
sends form to the bank (not HMRC)
Filed with
The bank
Deadline
6 months
from end of month of death (IHT due)
Fee
Free
bank pays HMRC directly
The catch-22 — why Direct Payment Scheme exists
  • The deadlock
  • The Direct Payment Scheme resolution
  • Which institutions participate
  • What if no bank participates or the balance is insufficient?
Completing IHT423 — one form per institution
  • Part A — Deceased's details
  • Part B — The IHT reference number
  • Part C — The account to debit
  • Part D — The amount to pay
  • Where to send the form
After payment — the unique code and probate
  • The unique code letter
  • Applying for probate with the unique code
  • After probate — HMRC's review
Before you start, you’ll need:
  • Who Files — The executor or administrator; the IHT423 form is sent to the financial institution (not to HMRC)
  • 2 pages · 18 fields guided
Section 1

The catch-22 — why Direct Payment Scheme exists

One of the most frustrating aspects of UK estate administration is the IHT payment deadlock. Understanding why it exists — and why IHT423 resolves it — makes the process less opaque.

The deadlock

To apply for a Grant of Probate (or Letters of Administration), you must confirm that Inheritance Tax has been paid, or that no IHT is due.

But the estate's bank accounts are frozen on death — banks refuse to release funds without sight of the Grant.

This creates a circular dependency: you can't pay IHT without the money, and you can't get the money without paying IHT.

The Direct Payment Scheme resolution

The DPS breaks the deadlock. Participating banks agree to pay HMRC directly from the deceased's account, before the Grant is issued, on receipt of a completed IHT423 form from the executor.

The bank deducts the amount from the deceased's account and sends it to HMRC.

Once HMRC has processed the IHT400 and the payment, it sends the executor a letter containing the unique code and estate values the probate application now requires.

Which institutions participate

Most major UK banks (Barclays, HSBC, Lloyds, NatWest, Santander, Halifax, Bank of Scotland, and others), building societies, and NS&I participate in the DPS.

The full list is available on HMRC's website.

Smaller banks and credit unions may not participate — in that case, you may need to use other estate funds (such as a joint account) to pay HMRC, or arrange a loan.

What if no bank participates or the balance is insufficient?

If the estate has no funds in a participating bank, or the balances are less than the IHT due, you need to find funds from elsewhere: a personal loan by the executors (to be reimbursed from the estate after probate); using joint accounts (which may pass by survivorship and are accessible without probate); life insurance policies that pay out directly to a named beneficiary (also probate-free); or a professional executor who can advance funds from client account.

Discuss options with the solicitor if stuck.

One of the most frustrating aspects of UK estate administration is the IHT payment deadlock. Understanding why it exists — and why IHT423 resolves it — makes the process less opaque.

HM Revenue & Customs (HMRC) · IHT423
Section 2

Completing IHT423 — one form per institution

If the estate's funds are spread across several banks, a separate IHT423 must be completed for each institution. Each form authorises that bank to pay a specific amount to HMRC.

Part A — Deceased's details

Full name, date of birth, date of death, and last address. These must exactly match the IHT422 application.

The bank uses these to locate the accounts.

Part B — The IHT reference number

Enter the IHT reference number from the IHT422 letter. This is essential — without it, the bank cannot make the payment.

Do not complete IHT423 until you have received the IHT reference number.

(This is why IHT422 must be applied for first, and with a 3-week lead time.)

Part C — The account to debit

The sort code, account number, and account name for the deceased's account at that bank.

The bank will only pay from this specific account — it will not consolidate across multiple accounts at the same bank automatically (though it may do so as a courtesy).

If you need funds from multiple accounts at the same bank, check with the bank whether one IHT423 or multiple forms are needed.

Part D — The amount to pay

The amount you are authorising the bank to pay to HMRC. This should not exceed the balance in the account.

You are responsible for ensuring the total payments across all IHT423 forms equals (or exceeds) the total IHT due.

HMRC matches every receipt to the estate through the IHT reference number.

Where to send the form

Send the completed IHT423 to the bank or building society — NOT to HMRC.

Each institution has its own bereavement or estate administration team address.

The form should be accompanied by a certified copy of the death certificate.

The bank contacts HMRC directly; you do not need to be involved in that exchange.

If the estate's funds are spread across several banks, a separate IHT423 must be completed for each institution. Each form authorises that bank to pay a specific amount to HMRC.

HM Revenue & Customs (HMRC) · IHT423
Section 3

After payment — the unique code and probate

Once HMRC has received the payment and processed the IHT400, it sends the executor a letter containing a unique code and the estate values.

That letter is what the probate application now requires — since 17 January 2024 there is no stamped IHT421 (or older D18 certificate).

The unique code letter

HMRC's confirmation that the IHT400 has been processed and payment received on account.

It is not a final clearance (HMRC will review the IHT400 in detail after probate) — it is the unique code plus the gross and net estate values you need to apply for the grant.

It is sent to the correspondence address you provided. Allow 20 working days from submitting the IHT400 before chasing HMRC.

Applying for probate with the unique code

When completing the probate application (online through GOV.UK, or by post with PA1P or PA1A), enter the unique code and the estate values exactly as they appear in HMRC's letter.

The probate service uses the code to verify the IHT position directly with HMRC — there is nothing to attach.

After probate — HMRC's review

Obtaining probate does not mean HMRC has accepted the IHT400 as correct.

HMRC typically has 35 days to open a formal inquiry after receiving the IHT400, and in practice may raise questions over the following 12–24 months.

The DPS payment is a payment on account; if HMRC later determines more IHT is due (for example because they challenge a valuation), you will need to pay the additional amount.

If less IHT was due than paid, HMRC will repay the excess with interest.

Once HMRC has received the payment and processed the IHT400, it sends the executor a letter containing a unique code and the estate values.

HM Revenue & Customs (HMRC) · IHT423
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FAQ

IHT423 questions, answered.

IHT423 is the Direct Payment Scheme instruction.

It authorises a bank, building society or NS&I to pay Inheritance Tax to HMRC directly from the deceased's account, before probate is granted.

It exists to break the deadlock where you need to pay IHT to get probate, but need probate to reach the money.

The executor (where there is a will) or the administrator (where there isn't).

The completed form goes to the financial institution holding the funds — not to HMRC.

If the estate's money is spread across several banks, you complete a separate IHT423 for each institution.

Inheritance Tax is due six months after the end of the month in which the person died (Inheritance Tax Act 1984 ss.216–233).

Because IHT423 needs the reference number from the IHT422 application — which itself takes about three weeks — and the bank needs time to process the payment, start the IHT422 well before the six-month point.

Timescales are indicative; confirm current processing times with the bank and HMRC.

No. IHT423 is free to use.

The bank pays the amount you specify on the form straight to HMRC out of the deceased's account — there is no charge from HMRC for the Direct Payment Scheme itself, though check whether your bank applies any administration fee.

The deceased's account details at each institution (sort code, account number and account name), the balance available in each account, the IHT reference number from IHT422, and a certified copy of the death certificate to enclose with each form.

Sending IHT423 to HMRC instead of to the bank.

The form goes to the financial institution, which then settles directly with HMRC — sending it to HMRC causes a significant delay.

The second trap is authorising more than the account holds: a bank will only pay up to the balance on the day it receives the form, so spread the total across several IHT423 forms if one account can't cover the bill.

Library

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These free institutional briefs cover the records and context that make this form easier — what to gather before you start.

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Deed of Variation Brief

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Inheritance Tax, Explained

The IHT completion product builds on this explanation — with your estate's figures, your asset values, and the forms that actually apply.

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IHT Form Route-Planner

The IHT completion product includes personalised form selection — so you start on the right form with the right evidence gathered first.

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All guides are available free from the Valoren library — no account required.

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Where this fits

IHT423 is one form. The file behind it is the rest.

Forms are easier when the records are ready.

For IHT423, that means the deceased's bank, building society and NS&I account details (sort code, account number, account name, and the balance available in each), the IHT reference number from the IHT422 application, and a certified copy of the death certificate to send with each form.

When you're ready — not before — our £179 Executor's First Hour walks you through registering the death, notifying banks and pensions, and getting probate started, in the right order. The free checklist above covers the essentials; this is for when you'd rather have a hand to hold. Executor's First Hour — £179

HM Revenue & Customs (HMRC)18 fieldsFree; the bank pays the amount specified in the IHT423 directly to HMRC10 minutes with Valoren
Before you apply

The Direct Payment Scheme lets a bank pay Inheritance Tax straight to HMRC. Once that's arranged, the next step is applying for the grant — PA1P if there's a will, PA1A if there isn't.

Next: apply for probate
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