Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Inheritance tax definition

What does Inheritance tax mean? Inheritance tax describes the taxation of wealth transfers on death and, in defined cases, on lifetime gifts and trust transfers. In the UK (England & Wales, Scotland and Northern Ireland), Inheritance Tax is a statutory regime under the Inheritance Tax Act 1984, charged at rates up to 40% on transfers of value. It is usually payable from the deceased’s estate by personal representatives. Lifetime charges arise on chargeable lifetime transfers (typically gifts into most trusts) and where a donor dies within seven years of a potentially exempt transfer. Key features include the nil-rate band and, where conditions are met,...

Inheritance Tax late payment: interest only; no penalty regime yet in force; outline of FA 2009 penalties and available reductions (UK)

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Practice notes

Penalties on late paid Inheritance tax (IHT)

Although interest frequently accrues on unpaid tax, missing the payment date for certain taxes can also lead to a Penalty. For details about interest that accrues on overdue liabilities, see Practice Notes: IHT—payment deadlines on death—Interest on IHT and Interest on late paid tax. A range of late payment penalty regimes operates across different taxes. This Practice Note looks at penalties for late paid inheritance tax, and records that there is presently no dedicated IHT penalty regime in force. Finance Act 2009 (FA 2009) brought in a late payment penalty framework intended to harmonise the Rules across the taxes. Its implementation is staged and, while it already applies to many taxes, it does not yet extend to overdue IHT. It should also be noted that, for income tax self-assessment and VAT, the late payment penalty regime is replaced by a new Sanctions regime introduced by Finance Act 2021, effective from various dates from 1 January 2023 onwards, depending on the type of taxpayer...

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Web page updated on 21/05/2026

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