IHT423 is the form you use to ask a bank, building society, NS&I, broker or investment manager to send Inheritance Tax straight to HMRC from the deceased's account, under the Direct Payment Scheme. It solves the probate catch-22: tax often has to be paid before the grant, but the accounts are frozen until the grant. You send one IHT423 per account to the organisation, not to HMRC.
This guide follows Schedule IHT423 (HMRC 11/24), the GOV.UK page for the form and the Direct Payment Scheme section of the IHT400 Notes, as of October 2026.
Why the scheme exists
The IHT400 Notes say a grant of probate may be needed to get access to the assets in an estate, which can make it hard to raise the tax that's due on an estate filing a full IHT400 account. Under the Direct Payment Scheme, participating organisations release funds from the deceased's accounts direct to HMRC to pay the tax, so the executors don't have to find the cash from their own pockets or borrow it.
Which accounts can pay
| Account type | What IHT423 asks the organisation to do |
|---|---|
| Bank or building society | Transfer a stated amount from the account to HMRC |
| NS&I | Transfer from the NS&I account, using the account number, not the NS&I number |
| Broker or investment management firm | Sell all or part of the holdings, listed asset by asset, and transfer the proceeds to HMRC |
The IHT400 Notes add two limits. The accounts must be in the deceased's sole name, so joint accounts can't be used. And the amount on the IHT423 shouldn't be more than the total Inheritance Tax due.
What the form asks for
| Account | Details on IHT423 |
|---|---|
| Bank or building society | Name of the bank or society, sort code, account number, any building society roll or reference number, and the amount in words and figures |
| NS&I | Leave the bank name and sort code blank and give the deceased's NS&I account number |
| Broker or investment firm | Name of the firm and account, whether you're selling all or part, each asset number and name, the number of shareholdings to sell, and the amount |
The form also carries HMRC's own bank details for the transfer, including details for paying from an overseas account, so the organisation has everything it needs on one document. Continue the asset list on a separate sheet if needed.
Who signs
The declaration says the people signing have applied for a grant of representation or confirmation, and asks for the amount to be transferred to HMRC. Everyone applying for the grant has to sign, and the form has space for up to four representatives with their names, addresses and signatures.
How the process runs
- Check with each organisation that held the deceased's funds whether it's part of the scheme. Many are, but not all.
- Contact each one early and prove you're an appropriate personal representative. Each does its own risk assessment and will usually want the original death certificate and other documents.
- Get the Inheritance Tax reference number. HMRC says a payment can't be matched to the estate without it.
- Complete a separate IHT423 for each account, or each broker or investment firm account.
- Send each IHT423 to the organisation at the same time you send the IHT400 to HMRC.
- The organisation transfers the funds to HMRC. Brokers and investment firms won't pay anything to the estate itself until they receive the original grant.
If too much is paid
The declaration covers this. If HMRC needs to repay tax that was paid before the grant was issued, it's authorised to return it to the deceased's account, and the funds stay with HMRC until the Inheritance Tax due is finalised. So an overpayment isn't lost, but it isn't quick cash for the estate either.
Forms often come in pairs, and the walkthrough of the inheritance tax reference application looks at another one you may meet.
When the scheme doesn't fit
- Only joint accounts, or an organisation that isn't in the scheme: you'll need another way to pay before the grant.
- No way at all to release funds: the IHT400 Notes describe a grant on credit, where you write to HMRC at BX9 1HT explaining why and saying how much you can pay now and how the rest will be raised.
- A grant on credit means signing an undertaking, a legally binding promise to pay within an agreed timescale, and HMRC still expects you to pay as much as you can before the grant.
Once HMRC receives notice of the payment, it links it to your IHT400. The organisations can tell you how long their transfer will take, and that timing feeds into when HMRC processes the account and, for England and Wales, when the probate side, including any IHT421 summary, can move on.
Common mistakes
- Sending IHT423 to HMRC. It goes to the bank, building society, NS&I or firm.
- One form covering several accounts. It's one form per account.
- Missing signatures from one of the people applying for the grant.
- Asking for more than the tax due.
- Leaving contact with the bank until the IHT400 is ready, then waiting weeks for its own checks.
- Leaving off the Inheritance Tax reference number, so HMRC can't match the payment to the estate.
The verdict
If the estate has cash or investments in the deceased's sole name, IHT423 is usually the simplest way to pay Inheritance Tax before probate. Line up each organisation early, get the IHT reference first, use one form per account, have every applicant sign, and send the forms out alongside the IHT400. Then ask each organisation how long its transfer will take.
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When the paperwork is unfamiliar, the walkthrough of the overseas estate inheritance tax form helps.
Frequently asked questions
What is IHT423?
It's the HMRC schedule used to ask a bank, building society, NS&I, broker or investment manager to pay Inheritance Tax to HMRC from the deceased's account under the Direct Payment Scheme.
Where do I send IHT423?
To the bank, building society, NS&I or firm holding the account, not to HMRC.
Can IHT423 be used for a joint account?
No. The IHT400 Notes say the accounts must be in the deceased's sole name.
Do I need one IHT423 for each account?
Yes. HMRC asks for a separate form for each account.
Who has to sign IHT423?
Everyone who's applying for the grant of representation or confirmation for the estate.
What happens if too much tax is paid through IHT423?
HMRC can return it to the deceased's account, and it stays with HMRC until the tax due is finalised.
