Higher interest on late IHT payments ‘should not cause problems’

Posted 19/08/2009

A financial advice group has dismissed the suggestion that the increase in interest on late inheritance tax (IHT) payments will be problematic.

The government recently announced that bereaved families must pay three per cent interest on late payments as of September 2009.

However, Calculis believes the move will only have a “small impact” and has been implemented with the government’s current budget deficit in mind.

“This is just a way to increase the state tax take a little bit really and is a nice easy way of doing it,” said Alex Pegley, director of Calculis.

He added that it is unlikely that the move will “ruffle any feathers”.

People in the UK are currently required to pay inheritance tax on estates that are valued at more than £325,000.

However, a recent poll by Norwich Union found that more than a fifth of those who are liable for IHT do not know they will have to pay the charge.