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When is Inheritance Tax paid: HMRC may charge interest on UK tax if you miss this deadline | Personal Finance | Finance

In the UK, a person’s estate – such as their possessions, property, and money – may be subject to Inheritance Tax, upon it being passed on to someone else. There are some instances when Inheritance Tax may not be payable, such as if the value of the estate is below the £325,000 threshold. Alternatively, if a person leaves everything above their threshold to a spouse, civil partner, charity, or a community amateur sports club, then there will normally be no Inheritance Tax to pay. It’s also possible to increase one’s threshold.

This may be done by giving one’s home to their children or grandchildren – in which case the threshold can rise to £475,000.

A couple who are married or in a civil partnership may also increase one of their thresholds, by transferring some of one’s to the other’s. explains: “If you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die.

“This means their threshold can be as much as £950,000.”

The standard Inheritance Tax rate is 40 per cent, and this is only charged on the value of the estate above the threshold.

There are some instances where reliefs and exemptions may apply.

Additionally, some assets may see a reduced Inheritance Tax rate of 36 per cent, should one leave 10 per cent or more of the “net value” to charity in their will.

Paying an Inheritance Tax bill

The website explains that the beneficiary or beneficiaries must pay Inheritance tax by the end of the sixth month after the person has died.

This means that should they have died in January, the tax bill must have been paid by July 31 of that year.

Should a person be making payments on a trust, there are different due dates.

If the tax has not been paid by the due date, then HM Revenue and Customs (HMRC) may charge interest.

It’s possible to work out how much interest may be payable by using the online HMRC Inheritance Tax interest calculator.

In some cases, a person may pay Inheritance Tax on things that may take time to sell.

This can be done in equal instalments over the course of 10 years, however interest may be payable and the first instalment is due at the end of the sixth month after a person’s death.

“You must say on Inheritance Tax Account form IHT400 if you want to pay in instalments,” advises

READ MORE: Inheritance Tax could be scrapped under Labour – but replaced with tax on gifts to family

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