Two different products that solve the same cash-flow gap
A probate loan is borrowing: a lender advances money against a payout expected from an estate, and the loan plus interest and fees is repaid when the estate distributes, usually months later. An inheritance advance works differently: a provider buys a slice of your future inheritance for a discounted lump sum today, so you are selling part of what you will receive rather than taking on a debt. Both exist because estate money is locked until the grant of probate is issued, while some bills, above all inheritance tax, fall due before it.
This page explains the mechanics, cost structures and risks in general terms. It does not name, rank or recommend any provider, and it is general information, not legal or financial advice. Taking on credit against an inheritance is a regulated financial decision that deserves independent advice.
The timing squeeze that creates the market
Inheritance tax is normally due by the end of the sixth month after the person died, and HMRC charges interest after that, per GOV.UK's guidance on paying inheritance tax. The same guidance confirms that you usually need to make a payment towards the tax before the grant of probate is issued. That is the circular problem: the estate's bank accounts and property are largely frozen until the grant arrives, but the grant will not arrive until at least some tax is paid.
Layer on the ordinary timeline (our guide to how long probate takes explains why even simple estates run to months) and the £526 application fee for estates over £5,000 on GOV.UK's probate fees page, and it is easy to see why executors and beneficiaries sometimes look at borrowing. Take three siblings inheriting their late aunt's £850,000 estate: she never married and left everything to them, so only her single £325,000 nil-rate band applies (the residence nil-rate band needs direct descendants), producing a £210,000 tax bill that needs addressing before the grant, while her house cannot be sold until the grant is issued. Products that bridge that gap will always find customers. The question is whether the gap can be bridged for free first.
Check the free routes before you borrow
- The Direct Payment Scheme. Banks and building societies can pay inheritance tax to HMRC directly from the deceased's own accounts, before the grant, with no borrowing at all. Our walkthrough of paying inheritance tax before probate covers exactly how it works.
- Instalments on property. Tax attributable to land and buildings can be spread over 10 equal yearly instalments, per GOV.UK's instalments guidance, though interest runs on the outstanding balance for most asset types. Only the first instalment is needed before the grant.
- The deceased's other assets. National Savings and Investments holdings and government stock can also be used to pay the tax directly.
- Ordinary bank finance. Some executors take a short personal loan or use a mainstream facility, then reimburse themselves from the estate. The estate meets legitimate administration costs, as our guide to how much probate costs sets out.
Only when these are exhausted, or when a beneficiary needs cash for their own reasons rather than for the tax bill, do the specialist products come into play.
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How the two structures compare
| Probate loan | Inheritance advance | |
|---|---|---|
| Legal form | Credit agreement (a debt you owe) | Usually a sale or assignment of part of your inheritance |
| What it costs | Interest for as long as probate takes, plus fees | A fixed discount: you receive less now than the share you give up |
| If probate drags on | Interest keeps accruing, so the cost grows | The price is typically fixed, so delay does not usually increase your cost |
| If the estate pays out less than expected | You may remain personally liable for any shortfall, depending on the terms | In most structures the provider bears the shortfall risk, not you |
| Regulatory position | Lending to individuals is generally FCA regulated territory | May sit outside consumer credit rules, which can mean fewer formal protections |
Neither structure is automatically better. A loan can be cheaper when probate is quick and the estate is certain; an advance shifts risk away from you but the discount pays for that transfer. Costs vary widely between providers and cases, so treat any headline rate with caution and ask for the total cost in pounds under both a fast and a slow scenario.
The risks to weigh before signing
- Cost against a short wait. If the estate is likely to distribute within a few months, the price of bridging that gap can be steep relative to simply waiting.
- Open-ended interest on loans. Probate delays are common and outside your control. A contested will, a slow property sale or an HMRC enquiry can multiply the interest bill.
- Personal liability. Read exactly what happens if the estate turns out smaller than valued. With a loan, the debt may follow you; with an advance, confirm in writing that it does not.
- Other beneficiaries. An executor borrowing on behalf of an estate needs the position documented carefully, because the cost falls somewhere, and co-beneficiaries may object to bearing it.
- Provider checks. Before dealing with any firm, check it on the FCA's Financial Services Register via the regulator's guide to how to check a firm is authorised. If a firm is not authorised for the activity in question, you may have no access to the Financial Ombudsman Service or the FSCS if things go wrong.
Where this fits in the wider probate picture
Bridging finance is a narrow answer to one specific pinch point. For the full picture of what the process involves and costs from start to finish, see our complete probate guide, and run your own estate's likely fees through the probate cost calculator before deciding whether any borrowing is needed at all. If the estate you are dealing with has a tax bill it cannot easily fund, a probate specialist can usually map the payment options, including the free ones, against your actual assets and timescales before you commit to a product whose cost depends on how long the wait turns out to be.