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HMRC internal manual

Inheritance Tax Manual

Payment by instalments: request to elect for instalments after tax paid in one sum

You should refer any application by taxpayers who have paid tax on instalment option property in one sum to change over to the instalment basis to a senior manager. The reference should state:

  • how much of the full tax on the property in question would not yet be due on the instalment basis

and

  • on current information, how much tax is likely to be required from the same taxpayers in respect of other property.

You may accept a request made on the taxpayer’s behalf by their agent. You do not have to insist on the request being made in a document signed by the taxpayers. Where switching back to instalments would result in a repayment of tax, any repayment is at our discretion. This is because a repayment of Inheritance Tax can only be made when too much tax has been paid, IHTA84/S241(1).

That is not the case in these circumstances and where the repayment is agreed, no interest supplement should be allowed, as the repayment is not ‘an amount paid in excess of a liability for tax’ within the terms of IHTA84/S231(1).