Probate and IHT Deadlines in the UK: Key Time Limits Executors Must Not Miss

Probate and IHT Deadlines: Protecting Reliefs and Avoiding Penalties

When someone dies, dealing with their tax affairs is often one of the most time-sensitive and technically demanding responsibilities for personal representatives. In the UK, reporting an estate to HM Revenue & Customs (HMRC) within the correct time limits is essential, particularly where there may be a liability to Inheritance Tax (IHT). Missing key deadlines can result not only in financial penalties and interest, but also in the loss of valuable reliefs such as the Residence Nil-Rate Band (RNRB) and transferable allowances from a late spouse or civil partner.

This article explains why timing matters, outlines the critical deadlines, and highlights the risks if unused nil-rate bands are not accepted.

Why Timely Reporting Matters

Personal representatives (executors or administrators) are legally responsible for:

1. Accurately valuing the estate at the date of death
2. Determining whether IHT is payable.
3. Submitting the correct IHT account to HMRC
4. Paying any tax due

If the estate exceeds the available nil-rate bands or reliefs, IHT is charged at 40% on the value above the threshold.

Failing to report correctly and on time can lead to:

1. Interest charges
2. Financial penalties
3. Delays in obtaining the grant of probate.
4. Loss of transferable allowances
5. Personal liability for the executors

Key IHT Time Limits

1. Payment Deadline

Any IHT due must be paid by the end of the sixth month after the month of death.

For example, if death occurs on 10 January, IHT is due by 31 July.

Interest begins accruing from the due date, even if the probate application is still in progress.

2. Filing Deadline

The IHT account (usually form IHT400 for taxable estates) must generally be submitted within 12 months of the end of the month of death.

Late filing can result in penalties depending on the length of delay and whether the failure was careless or deliberate.

3. Claiming the Transferable Nil-Rate Band (TNRB)

If a spouse or civil partner predeceased the deceased and their nil-rate band was not fully used, the unused percentage can be transferred.

There is no separate short statutory deadline for claiming TNRB; it is usually claimed as part of the IHT return. However, if the claim is omitted and not corrected within statutory amendment windows, HMRC may refuse the claim.

Importantly:

• The claim must be supported by documentation relating to the first spouse’s estate.
• The transferable amount is a percentage, not a fixed monetary figure.

Failure to provide adequate evidence within the appropriate time can result in the loss of the transferable allowance.

4. Claiming the Residence Nil-Rate Band (RNRB)

The Residence Nil-Rate Band provides an additional allowance where a qualifying residence passes to direct descendants.

The RNRB is currently up to £175,000 per person, potentially doubling to £350,000 for married couples or civil partners.

Claims must be made as part of the IHT return. Late or incomplete claims risk being rejected if they fall outside the statutory time limits for amendments.

5. Claiming Unused RNRB from a Predeceased Spouse or Civil Partner

Like the transferable nil-rate band, unused RNRB can be transferred from a predeceased spouse or civil partner.

Key points:

• The transferable amount is based on the unused percentage, not the monetary figure at the time of the first death.
• The claim must be made within two years of the second death.
• HMRC has discretion to accept late claims in limited circumstances, but this cannot be relied upon.

If the claim is made outside the time limit and HMRC does not exercise discretion, the additional RNRB may be permanently lost.

This can significantly increase the estate’s IHT liability.

The Financial Impact of Missing Allowances

The standard nil-rate band (NRB) is £325,000. Combined with the RNRB, a married couple’s estate may potentially benefit from allowances totalling up to £1 million.

If unused allowances are not successfully claimed:

• The taxable estate increases
• IHT at 40% applies to the excess.
• The estate may become IHT-payable when it would otherwise have fallen below the threshold.

For example:

If £350,000 of transferable RNRB is disallowed due to a missed deadline, the additional IHT exposure could be:

£350,000 × 40% = £140,000 additional tax

That liability falls on the estate—and potentially on executors personally if distributions have already been made.

Penalties and Interest

If HMRC determines that IHT is payable and the estate has underreported liability due to:

1. Failure to claim allowances correctly.
2. Inaccurate valuations
3. Careless or deliberate behaviour

Penalties may apply in addition to interest.

Interest

Interest accrues automatically on unpaid IHT from the due date until payment is made.

Penalties for Late Filing

1. Initial fixed penalties for failure to file
2. Daily penalties for continued delay
3. Tax-geared penalties where the delay exceeds six months.
4. Higher penalties for deliberate inaccuracies

If unused nil-rate bands are rejected and tax becomes payable as a result, HMRC may charge interest from the original due date—even if the dispute over allowances is ongoing.

Executor Risk and Personal Liability

Executors can be personally liable if:

1. They distribute estate assets before settling IHT.
2. They fail to take reasonable care in preparing the IHT return.
3. They miss statutory claim deadlines.

Obtaining professional advice early can mitigate this risk.

Practical Steps to Protect the Estate

1. Identify all potential allowances immediately after death.
2. Gather documentation relating to any predeceased spouse or civil partner.
3. Confirm eligibility for RNRB and transferable allowances early.
4. Calendar statutory deadlines, particularly the two-year RNRB claim limit.
5. Pay estimated IHT before the six-month deadline if necessary.
6. Seek professional tax advice for complex estates.

Conclusion

Timely and accurate reporting to HM Revenue & Customs is critical in safeguarding estate value. While the nil-rate band and Residence Nil-Rate Band can reduce or eliminate IHT liability, these reliefs are not automatic. They must be properly claimed within statutory time limits and supported by appropriate evidence.

Failure to do so can transform a non-taxable estate into one facing significant IHT exposure, along with interest, penalties, and potential personal liability for executors.

In estate administration, deadlines are not procedural formalities, they are financial safeguards.