Ease the emotional burden of Inheritance Tax with the Direct Payment Scheme

By Anna Brooksbank, Senior Business Development Manager.

Your clients losing a loved one is an emotionally challenging period for them and a moment where they are going to need to rely on their financial advisor. During this difficult time dealing with Inheritance Tax (IHT) responsibilities can add significant stress.

One effective yet underutilised solution you could introduce is the Direct Payment Scheme (DPS), accessible through our Blackfinch Adapt or AIM IHT solution.

The DPS scheme is a scheme run by HMRC of which Blackfinch is a voluntary member. It allows executors to settle the IHT liability by taking funds directly from the deceased client’s Blackfinch Adapt or AIM Service.

This means that any IHT liabilities can be settled by funds been directly sent to HMRC from the deceased’s holdings. This allows for the process of grant of probate to be sped up.

Save clients from stress and interest

As a financial advisor, using the DPS is a clear demonstration of your thoughtful planning during a time when your clients most need support. IHT must typically be paid within six months of a person’s death but often settling the estate can take six to twelve months or more.

After the six months has passed on the IHT burden, interest starts building on outstanding amounts. Without proper arrangements, families might feel rushed into liquidating assets prematurely or arranging costly short-term finance. By using the DPS, you ensure that IHT liability is paid promptly.

To access the Direct Payment Scheme on behalf of a client:

Ask Blackfinch to make you a ‘personal representative’.
Get your client’s Inheritance Tax payment reference number.
Fill in form IHT423 and send it to Blackfinch. Send a separate form for each account you want to pay HMRC from.
Send Inheritance Tax Account form IHT400 and any supplementary pages or supporting documents to HMRC. If you’re in Northern Ireland, include Probate Summary form IHT421. If you’re in Scotland, include Confirmation form C1.

Helping beneficiaries of a client pay their IHT bill

IHT planning focuses on your current clients, but the impact on the clients’ beneficiaries, often their children, can be overlooked. This is despite them being the ones who’ll ultimately bear the tax burden. Investing through an approved DPS member like Blackfinch simplifies the IHT process and positions you to build relationships with this next generation of clients.

Conclusion

By investing with Blackfinch and having access to the DPS, the process of settling IHT liabilities can be made simpler and more efficient. This can alleviate emotional and financial pressures clients face when losing a loved one.

Advisors who introduce DPS proactively not only simplify the IHT process but also reinforce their commitment to compassionate client service during sensitive times. Your thoughtful planning can make a genuine difference, helping families navigate Inheritance Tax smoothly, allowing them essential space and time to heal.

If you would like to know more about the Direct Payment Scheme, Inheritance Tax and how to structure portfolios to manage client tax headaches, then get in touch with our Business Development Team. They’re based all across the UK, have extensive experience in the tax-efficient investment landscape and can offer a wide range of services – from 1-2-1 or group training through to worked tax calculations and IHT calculators.

Blackfinch offers a number of investment solutions, to address a range of client objectives.
Request an illustration or get in touch with your local Business Development Manager (BDM) today.

Please note:

Benefits of tax-efficient investments are subject to change and personal circumstances. Business Relief rules are changing in April
2026. See the Guide to Business Relief for more information.

IMPORTANT INFORMATION
Capital at risk. All information correct at April 2025.