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HMRC internal manual

Inheritance Tax Manual

Grants on credit: undertakings involving assets abroad

Where assets are situated outside the UK the undertaking may need to take account of the need to apply for a grant in the other country. If this is the case the undertaking should be along the following lines:

  • to submit the application for Probate in relation to the deceased’s estate in England and Wales as soon as I/we have received the receipted Probate summary schedule IHT 421 and to notify HMRC as soon as the Grant/Letters of Administration have been issued
  • to apply for a Grant of Probate to be issued in [name of country] in relation to the deceased’s estate situated there within [X weeks] of the issue of the Grant of Probate in relation to the deceased’s estate in England and Wales
  • immediately following receipt of the Grant of Probate in [name of country] and at all stages through the process I/we will, without delay, take the steps necessary to realise sufficient assets in the estate to pay the inheritance tax and interest due
  • pay to HMRC the outstanding tax and interest from proceeds of sale/realisation of the assets as soon as it is received.
  • not to distribute any assets of the estate until the Inheritance Tax and interest due have been agreed.

The precise timings will depend on the circumstances. We would expect the tax to be paid within 2 months of the IHT421 or C1 being issued but this may depend on the process or processes the PRs need to go through. Only very rarely would we expect the time needed to exceed 3 months.

The PRs compliance with any agreement must be closely monitored. Any undertaking should include the requirement to tell HMRC immediately if there is any delay in the process or if the tax cannot be paid within the time specified.