Date for payment of IHT (Grants of representation)-FS Flashcards
(8 cards)
What is the general deadline for payment of inheritance tax?
Inheritance tax must be paid six months after the end of the month in which the deceased died.
What is the consequence of failing to pay inheritance tax by the deadline?
Interest accrues on unpaid tax. Also, the probate registry will not issue a grant of representation until inheritance tax on non-instalment property has been paid.
Categories of Property Eligible for the Installment Option (10 Annual Installments)
- Land and residential property of any description
- A business or interest in a business
- Quoted or unquoted shares where the deceased had control (i.e. >50% shareholding)
When can inheritance tax be paid in installments?
When the inheritance tax is charged on installment-option property, and the personal representatives elect to pay in 10 annual installments. The first installment is due six months after death.
What must be paid to obtain the grant of representation?
At least:
- All tax due on non-instalment property, and
- The first installment on any installment-option property, if the option is exercised.
What is the Definition Non-Instalment Property
Property that does not qualify for payment by installments, such as cash, personal chattels, or shares without control in a company. Inheritance tax on this must be paid in full within six months.
If a deceased’s house qualifies for installment payments, how is inheritance tax handled?
The personal representatives may pay the tax due on the house in 10 equal annual installments. The first installment is due within six months after death.
In the Janet example, how is the £200,000 inheritance tax split for payment?
- £100,000 (non-instalment property) → due in full within 6 months
- £100,000 (on the house) → pay £10,000 annually over 10 years, with first payment due at the 6-month mark
