Probate & Inheritance Tax Bridging Loans
Bridging Finance — Probate & IHT
Inheritance tax has an unkind timing rule: much of it must be paid before the grant of probate, which is also before the estate's assets can be sold to pay it. A probate bridging loan breaks that deadlock, using property in the estate (or property you own) as security, so the tax gets paid, probate proceeds, and nothing is sold in a hurry at the wrong price.
The problem this solves
Executors · Beneficiaries · Trustees
Executors face a circle: HMRC wants inheritance tax within six months of death, the grant of probate often can't issue until arrangements for the tax are in place, and the money to pay it is usually locked inside the very property the estate can't yet sell. The traditional answers, personal borrowing by the executors, HMRC instalment plans with interest, or a rushed sale below value, all cost the beneficiaries money. Short-term secured lending is usually cleaner.
How we structure it
The right structure depends on where the estate is in the process and who is borrowing, executors, beneficiaries, or trustees. We lend secured on estate property or on other property the borrowers own, first or second charge, with interest retained so the estate makes no monthly payments. The exit is the estate: the sale of the property, or distribution once probate completes. We work with estates held in trusts and complex structures routinely, and we coordinate directly with the estate's solicitors.
Beyond the tax bill
Where else an estate bridge helps.
Refurbishment finance can sit alongside a probate bridge where an inherited property needs work before sale.
- Buying out a beneficiary who wants cash while others want to keep the property
- Funding repairs so an inherited property sells at full value rather than “needs work” value
- Settling estate debts to stop interest running while the sale completes
Common questions