Readers' forum : Property conundrum

I am the executor of the estate of a deceased client. The deceased’s will provides that after payment of certain specific legacies the net estate would pass into a discretionary trust for the benefit of a class of beneficiaries. Due to a large percentage of the estate assets being in real property we have elected to pay the inheritance tax by instalments because there is insufficient cash to pay it all outright. However this means that we are holding a large amount of cash which is earning very little interest in a bank deposit account.

At the same time the executors will be liable to pay interest on the inheritance tax at 3% because the property is not business or agricultural property. We are receiving rental income from the properties which is liable for income tax at 20% while the estate is in...