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

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

  • Late payment penalties—inheritance tax
  • Inheritance tax
  • Current rules relating to late payment of IHT
  • Interest on late payment of IHT
  • Harmonised penalty regime
  • Penalty reduction and suspension
  • Reasonable excuse
  • Special reduction
  • Suspended penalties

Late payment penalties—inheritance tax

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

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 was to be introduced in stages and is not yet fully in force. In particular, it does not yet apply to overdue IHT. It is worth noting that the late payment penalty regime in relation to income tax self-assessment and VAT is being replaced by a new sanctions regime introduced by Finance Act 2021. For further information, see News Analysis: Spring Budget 2021—Private Client analysis — Interest harmonisation and reform of penalties for late submission and late payment of tax.

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

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