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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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End of instalment option: introduction

In outline, the rules governing the end of the instalment option are

  • The persons paying the tax by instalments may change their minds and pay the outstanding balance of the tax in one sum with accrued interest whenever they wish.
  • The outstanding balance of the tax becomes payable in full immediately if:

    • the property is sold (IHTM30322) or
    • an interest or part of an interest in a business (IHTM25051) is sold or
    • cash is secured when a partnership (IHTM25091) share is paid out (whether or not under the terms of a partnership agreement) otherwise than on sale.

But if the above events take place before the date when the first instalment wouldotherwise be due, the full tax and interest becomes payable on the first instalment date.

  • Where only part of the qualifying property is sold, a proportionate part of the tax and interest becomes payable.
  • There are additional special provisions where the chargeable transfer was made otherwise than on death (IHTM30324).