UK Inheritance Tax (IHT) Payments Over 10 Years

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Inheritance tax (IHT) in the UK can be a significant burden, especially if you've just received an asset-rich but cash-poor estate. What many don't know is that you can actually pay your UK inheritance tax over a period of 10 years in certain cases. In this video, we'll explain how this little-known option works.
Key Dates: The initial IHT payment is generally due six months after the end of the month in which the deceased passed away. For example, if someone passed away on March 15, the initial IHT payment would be due by September 30. Subsequent instalments would be due on the anniversary of the initial payment.
Tax Forms: To opt for this, you'll need to fill out HMRC form IHT400 along with the instalment option on form IHT435.
Example 1: Imagine Sarah inherited a valuable piece of land but has limited liquid assets. She can opt to pay the IHT over 10 years, easing her financial stress and possibly avoiding the need to sell the land.
Example 2: Peter inherited an art collection. Selling it quickly would mean losing its value. By opting to pay the IHT over 10 years, he can hold onto the art until he finds a buyer willing to pay its real value.
Join us as we delve into the details, legal requirements, and potential pitfalls of this 10-year IHT payment plan. Don't forget to like, subscribe, and turn on notifications for more UK tax insights.

[@intheclarts]

A couple of questions on this one.... Can you make overpayments during the ten years of the 'loan' , say if there becomes a convenient time to sell a property? Or indeed pay it off altogether? Secondly, is the interest charged deductable on your annual tax bill?.

[@UK-Property-Tax-Accountants]

You pay interest on the outstanding balance. It is not the case of making under or overpayments. You have 10 years to pay the liability. The interest charged may not be offset against income tax, sadly.

[@rajibhossenDU]

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