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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Assessing: calculations: death estate: interest

As well as the tax to pay, you must also include the interest (IHTM30341) charge in your calculation.

It is calculated automatically by COMPASS (IHTM31101), which shows how the interest charge is arrived at on the calculations themselves. You can view how the interest is calculated by selecting the ‘Interest’ button on the bottom left of the assessment window.

If COMPASS has calculated the interest incorrectly (only usually in complicated IOP cases), use the adjustments (IHTM31192) box to amend the overall interest figure.

You must calculate the interest yourself when issuing a calculation on the manual template (IHTM31301) and insert the total figure in the appropriate box. Attach a copy of your calculations (usually the interest calculator (IHTM31511) printout) to the calculation so the taxpayer can understand how the total figure is arrived at.

Follow the instructions at IHTM31511 on calculating the interest charge.