Interest period: instalments without interest relief
In most circumstances instalments (IHTM30191) of tax are without interest relief, i.e. interest on the unpaid tax is added to each instalment and paid accordingly (IHTA84/S227 (3)).
Thus in the case of the first instalment interest is charged
- on that instalment only
- from the due date to the date of payment.
However when the second instalment is assessed (IHTM31184) interest is charged
- on that instalment only from its due date to the date of payment (in practice, date of assessment)
- on the whole of the tax outstanding between the due date of the first instalment and the due date of the second (i.e. for one year).