My aunty has recently passed away and left a property worth around £750,000 to my mum. She didn’t have any other assets, savings, investments or any life insurance policies. We’re trying to understand what happens if the estate doesn’t have enough cash to pay the inheritance tax (IHT) liability on her estate. In a situation like this, is the tax still due upfront, and would the property need to be sold (or part of it released or equity released) to cover the IHT bill? Are there any options for paying the tax in instalments or delaying payment until the property is sold? 

Arthur Weller replies: 

You are correct that the IHT is due upfront. You have the option of taking out a loan to pay the IHT. There is potentially a relief for the interest paid to the lender in these circumstances. Alternatively, you could apply to pay the IHT by equal yearly instalments over ten years: see www.gov.uk/paying-inheritance-tax/yearly-instalments).