Where an inheritance tax instalment payment is made late, what penalties and interest may be charged by HMRC?

inheritance tax instalment option

Section 227 of the Inheritance Tax Act 1984 (IHTA 1984) provides that where inheritance tax (IHT) is payable in respect of certain categories of qualifying property, the person liable may elect to pay in ten equal yearly instalments if:

1. •

   the chargeable transfer was made on death

2. •

   the IHT is borne by the person benefiting from the transfer, or

3. •

   the chargeable property is settled property remaining in the settlement after the chargeable event

Qualifying property consists of:

1. •

   land, shares or securities giving control of a company

2. •

   unquoted shares or securities not giving control, provided they remain unquoted from the date of transfer to the transferor’s (or transferee’s earlier) death

3. •

   a