Inheritance Tax Act 1984

InterestU.K.

233 Interest on unpaid tax.U.K.

(1)If—

(a)an amount of tax charged on the value transferred by a chargeable transfer [F1not within paragraph (aa) below and] made after 5th April and before 1st October in any year and otherwise than on death remains unpaid after the end of the period ending with April in the next year, or

[F2(aa)an amount of tax charged under Chapter 3 of Part 3 of this Act on the value transferred by a chargeable transfer remains unpaid after the end of the period of six months beginning with the end of the month in which the chargeable transfer was made, or]

(b)an amount of tax charged on the value transferred by [F3a chargeable transfer not within paragraph (a) or (aa) above] remains unpaid after the end of the period of six months beginning with the end of the month in which the chargeable transfer was made, or

(c)an amount of tax chargeable under section 32, [F432A], 79(3) [F5or 126] above or under Schedule 5 to this Act F6. . . remains unpaid after the end of the period of six months beginning with the end of the month in which the event occasioning the charge occurs,

[F7then, subject to subsection (1A) below] it shall carry interest from the end of that period at the rate applicable under [F8section 178 of the Finance Act 1989.]

[F9(1A)If, under section 30 above, the Board agree to accept property in satisfaction of any tax on terms that the value to be attributed to the property for the purposes of that acceptance is determined as at a date earlier than that on which the property is actually accepted, the terms may provide that the amount of tax which is satisfied by the acceptance of the property shall not carry interest under this section from that date.]

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F10

(3)Interest payable under this section shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F11

234 Interest on instalments.U.K.

(1)Where tax payable on the value transferred by a chargeable transfer—

(a)is payable by instalments under section 227 above and is attributable to the value of any shares, securities, business or interest in a business, or to value treated as reduced under Chapter II of Part V of this Act, or

(b)is payable by instalments under section 229 above,

it shall, for the purposes of any interest to be added to each instalment, be treated as carrying interest from the date at which the instalment is payable.

(2)Subsection (1) above shall not apply to tax attributable to the value of shares or securities of a company falling within paragraph (a) of subsection (3) below (not being tax attributable to value treated as reduced under Chapter II of Part V of this Act) unless it also falls within paragraph (b) or (c) of that subsection.

(3)The companies referred to in subsection (2) above are—

(a)any company whose business consists wholly or mainly of one or more of the following, that is to say, dealing in securities, stocks or shares, land or buildings, or making or holding investments;

(b)any company whose business consists wholly or mainly in being a holding company ([F12as defined in section [F131159 of and Schedule 6 to]] the [F14Companies Act [F152006]]) of one or more companies not falling within paragraph (a) above;

[F16(c)any company—

(i)whose business is wholly that of a market maker or is that of a discount house and (in either case) is carried on in the United Kingdom, or

(ii)which is of a description set out in regulations under section 107(5) of the Finance Act 1986.]

[F17(4)In this section “market maker” means a person who—

(a)holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities, stocks or shares at a price specified by him, and

(b)is recognised as doing so by the Council of The Stock Exchange.]

235 Interest on overpaid tax.U.K.

(1)Any repayment of an amount paid in excess of a liability for tax or for interest on tax shall carry interest from the date on which the payment was made [F18until the order for repayment is issued] at [F19the rate applicable under section 178 of the Finance Act 1989].

(2)Interest paid under this section shall not constitute income for any tax purposes.

236 Special cases.U.K.

(1)Section 233 above shall apply in relation to—

(a)the amount by which tax chargeable on the value transferred by a chargeable transfer made within [F20seven years] of the transferor’s death exceeds what it would have been had the transferor died more than [F20seven years] after the transfer, . . . F21

(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F21

as if the chargeable transfer had been made on the death of the transferor.

[F22(1A)Section 233 above shall apply in relation to the amount (if any) by which—

(a)the tax chargeable on the value transferred by a chargeable transfer made under Chapter III of Part III of this Act within the period of seven years ending with the settlor’s death,

exceeds

(b)what that tax would have been had the settlor died more than seven years after the date of the transfer,

as if the chargeable transfer had been made on the death of the settlor.]

(2)Tax overpaid or underpaid in consequence of—

(a)section 146(1) above, or section 19(1) of the M1Inheritance (Provision for Family and Dependants) Act 1975, or

(b)the corresponding provision of the M2Inheritance (Provision for Family and Dependants) (Northern Ireland) Order 1979,

shall not carry interest for any period before the order there mentioned is made.

(3)Tax repayable on a claim under section 146(2), . . . F23 or 150 above shall carry interest (which shall not constitute income for any tax purposes) at the [F24rate applicable under section 178 of the Finance Act 1989] from the date on which the claim is made.

(4)Tax repayable under section 147(2) above shall carry interest (which shall not constitute income for any tax purposes) at the [F25rate applicable under section 178 of the Finance Act 1989] from the date on which the tax was paid; and tax charged by virtue of section 147(4) above shall carry interest at that rate [F26from the end of the period mentioned in section 233(1)(b) above.]