Jump to content
House Price Crash Forum
Sign in to follow this  
redwing

Inheritance Tax - Interest On Late Payments

Recommended Posts

I read this in yesterday's Daily Telegraph. It must have been a reprint of an article published a week ago on their web site.

Basically, HMRC is increasing the interest on late payments (which are due 6 months after the death of the legator) from 0% to 3%

Historically the late payments rates are pegged to the Bank Rate and have been just below or above this level in recent years. When the Bank Rate was cut to a historic low of just 0.5 per cent, both the rate for late payment and the interest paid by the taxman on over payments dropped to 0 per cent.

HMRC has since decided to increase the interest payments. From next month, late payments will be charged at a rate of 2.5 per cent above the Bank Rate, while the interest paid on overpayments will be made at 1 per cent below the Bank Rate – though this will not go below a floor of 0.5 per cent.

This makes sense to me. Otherwise there's no penalty at all for late payment.

But the 6 months' grace period is quite a short time to go through probate and sell off any property needed to pay the IHT.

Perhaps this will help to make the sellers of such property keener to get it away. And therefore moderate there asking/selling prices.

Those forced to sell properties to raise money to settle their tax bill will be particularly hard hit. Rather than delay the sale in the hope of securing a higher price once Britain has emerged out of the current housing crisis they will have to rush onto the market to avoid the charges.

Although you have to a be pretty wealthy family for it to apply:

HMRC said just 3 per cent of estates pay inheritance tax - estimated to reach 12,000 in the current tax year - and those struggling to pay the bill can choose to pay in installments over up to 10 years which will nevertheless be subject to the late payment interest charges.

So, it's unlikely to have a massive effect.

But every little helps [as the devil incarnate is fond of saying]. And it should make a few sellers sell now rather than waiting for a "recovery" in the housing market.

Share this post


Link to post
Share on other sites

OK. I give up. Clearly I'm pi55ing in the wind. And an article that suggests a possible contributory factor in the lack of supply of houses for sale isn't really right for this site.

Either that or:

1. the factor is so immeasureably small that all you smart folk out there think it's not worth commenting on.

or

2. nobody really understood my arguement (or that of the writer of the article).

or

3. not many people on this forum really care much about the housing market.

or

4. it's already been discussed to death [i did check and couldn't see anything]

or

5. ugh! It's about death.

What really is surprising is that there no one jumped on the :

6. "typical nazi/commie state taxing us all till we bleed let's not have a public health service, or public education and send all the overseas legators back home; in coffins. naturally, in wicker coffins. No, cardboard coffins."

For the few of you who read the OP, thanks.

ps. any suggestions on how to make my posts more eye catching, please post below.

Share this post


Link to post
Share on other sites

Looks like stoozing for the rich - the wrinklies drop off their perch, leave you shed loads of cash and property, then your smart lawyer says don't bother selling and paying the IHT as there's no penalty. Just keep the property till the market rises again and put all the cash in bonds. Meanwhile HMRC will write to you every now and then saying please please send us a large cheque, but you can ignore them with impunity - as the penalty for late payment is nil.

With tax receipts in the state they're in we can expect many more such measures. Hopefully they'll get round to taxing non-doms, city t*ss*rs, and putting a levy on private equity leveraged buyouts (as those have trashed the tax take as well).

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   289 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.