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HMRC internal manual

Inheritance Tax Manual

Assessing: calculation principles: interest

As well as the tax to pay at each Entry (IHTM31011) you have to include any interest (IHTM30341) charge in your calculation.

The interest charge is due on the unpaid tax from the due date (IHTM30151) to the date you raise the calculation, or the date any earlier deposit was received. Deposits (IHTM31751) are discussed in more detail later in this section of guidance.

There are different methods for calculating interest due on instalments, depending on whether the instalment is due with or without interest relief (IHTM30363).

Interest is calculated automatically by COMPASS (IHTM31101) when you raise a calculation. But there are a few occasions when you have to check (IHTM31550) the amounts calculated.

Where you raise a manual calculation (IHTM31301), you will have to calculate the interest charge separately. You can do this by using the ‘interest calculator’ (IHTM31511) on SEEs Forms and letters.