If there’s a will, it’s usually the executor of the will who arranges to pay the IHT. If there isn’t a will, it’s the administrator of the estate who does this. You can pay IHT from funds within the estate, or from money raised from the sale of the assets.
In actuality, most IHT is paid through the Direct Payment Scheme (DPS). This means, if the person who died had money in a bank or building society account, the person dealing with the estate can ask for all or some of the IHT due to be paid directly from the account through the DPS.
The liability will typically need to be paid within six months from the date of your death, and failure to settle the bill will result in interest being charged by HM Revenue & Customs. Once the liability has been paid, your executors can apply for a Grant of Probate which will allow them to legally access the rest of your assets.
Once the tax and debts are paid, the executor or administrator can distribute what remains of the estate.