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Inheritance tax interest rate rise 'no surprise'
20/08/2009
The news that bereaved families will have to pay three per cent interest on late payments of inheritance tax from next month is no surprise, according to one commentator.
Alex Pegley, director of financial advice firm Calculis, said that HM Revenue and Customs' (HMRC's) decision to raise the charges "is just a way to increase the state tax take a little bit really".
He added: "It may only have a small impact, but it all helps at the minute as far as the government's huge current budget deficit is concerned."
The move, which has garnered criticism from campaigners, will see bereaved families being charged interest set at 2.5 per cent above the base rate from September on inheritance tax payments not made within six months of the death.
In a statement, HMRC said: "Interest is not a penalty but compensation for tax paid late."
Inheritance tax is charged on estates, including assets such as property, possessions, money and investments, worth a total of more than £325,000.
Lenore Rice of Wilson Nesbitt solicitors commented: "Taxpayers should not be too alarmed at this increase which was reduced from three per cent on January 6th this year on a sliding scale to two per cent then on January 27th to one per cent and ultimately zero per cent on March 25th.
"Those mostly affected may be families endeavouring to sell property in the present climate and who elect to pay the inheritance tax bill by instalments."
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Alex Pegley, director of financial advice firm Calculis, said that HM Revenue and Customs' (HMRC's) decision to raise the charges "is just a way to increase the state tax take a little bit really".
He added: "It may only have a small impact, but it all helps at the minute as far as the government's huge current budget deficit is concerned."
The move, which has garnered criticism from campaigners, will see bereaved families being charged interest set at 2.5 per cent above the base rate from September on inheritance tax payments not made within six months of the death.
In a statement, HMRC said: "Interest is not a penalty but compensation for tax paid late."
Inheritance tax is charged on estates, including assets such as property, possessions, money and investments, worth a total of more than £325,000.
Lenore Rice of Wilson Nesbitt solicitors commented: "Taxpayers should not be too alarmed at this increase which was reduced from three per cent on January 6th this year on a sliding scale to two per cent then on January 27th to one per cent and ultimately zero per cent on March 25th.
"Those mostly affected may be families endeavouring to sell property in the present climate and who elect to pay the inheritance tax bill by instalments."
Contact us for legal advice
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