HMRC internal manual

Inheritance Tax Manual

Assessing: introduction: introduction to calculations

To collect Inheritance Tax and interest due to HMRC, and to account for the payments made to us, we calculate the amount due. All calculations are recorded on the SAGE (IHTM31851) system as an accounting check.

As the case owner you are responsible for issuing calculations and maintaining the accounting records.

Unless they are supported by a Notice of Determination (NOD) (IHTM37001) or you are issuing a clearance letter with them (IHTM40010), the calculations you raise are simply informal calculations of tax and interest. If the taxpayer or agent disagrees with the calculation, you must review the figures and resolve the discrepancy with them by letter or on the phone.

This section of the manual is broken down to provide:

  • general guidance about the principles around raising a calculation,
  • the mechanics of how you would prepare a calculation on COMPASS (IHTM31101) or on the manual template (IHTM31301), and then
  • guidance on the calculations to include.

It also provides greater detail on deposits (IHTM31751) and your accounting responsibilities.

The guidance relates to death, lifetime and settlement calculations.