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HMRC internal manual

Inheritance Tax Manual

Special rules: property accepted in satisfaction of tax

When property is accepted in satisfaction of tax or duty under IHTA84/S230 (but not IHTA84/S231) or Para 17 Sch 4 FA 1975 (under S8 (3)(a) to (c) National Heritage Act 1980) it may be accepted on terms that its value for the purpose of the acceptance is to be taken at a date earlier than the date on which the property is actually accepted.

If so, the terms may also provide that the amount of tax, which is satisfied by the acceptance, shall not carry interest from that earlier date. Thus if the acceptance price is based on the value of the property at the date of the offer (rather than the date of the acceptance), interest on the tax will cease to accrue from the date of the offer.

IHTA84/S233 (1A) and IHTA84/S97 apply only where the acceptance occurs on or after 17 March 1987. Between them the two provisions cover acceptances in satisfaction of Inheritance Tax (IHT), Capital Transfer Tax (CTT) and Estate Duty (ED). The date when the liability of the tax or duty to be wholly or partly satisfied by the acceptance arose does not matter.

The Heritage section will state the date on which interest ceases to accrue. Refer to Heritage all claims for waiver of interest under IHTA84/S233 (1A) and IHTA84/S97 or enquiries about them, via the Compliance Group Specialist C-1 (Sco).