Late payment penalties—inheritance tax
Late payment penalties—inheritance tax

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • Late payment penalties—inheritance tax
  • Inheritance tax
  • Penalty reduction and suspension

While interest often accrues on overdue tax (see Practice Notes: IHT—payment deadlines on death—Interest on IHT and Interest on late paid tax), the late payment of certain taxes may also attract a penalty.

There are a number of late payment penalty regimes in place across the various taxes. This Practice Note considers penalties on late paid inheritance tax (IHT), noting that there is currently no IHT penalty regime in force.

Finance Act 2009 (FA 2009) introduced a late payment penalty regime that was intended to harmonise the rules for the different taxes. This is being introduced in stages and is not yet fully in force. In particular, it does not yet apply to overdue IHT.

For the rules relating to other taxes which are paid late, see Practice Notes: Late payment penalties—income tax, capital gains tax and corporation tax, VAT penalties and Late payment penalties—PAYE, NICs and construction industry scheme.

In addition to late payment penalties, there are penalties for the late filing of tax returns. As with late payment penalties, the rules vary across the different taxes, and are being replaced by a new regime in FA 2009 that is being introduced in stages.

Inheritance tax

Current rules relating to late payment of IHT

Taxpayers who are late in the payment of IHT are currently only subject to interest on the overdue amount.