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HMRC internal manual

Inheritance Tax Manual

Assessing: calculating interest: general interest charge on IOP (WIR) cases

Where Instalment Option Property (IOP) (IHTM31012) qualifies for interest relief (IHTM30363), the outstanding balance not yet due if does not carry an interest charge.

You should only charge interest if an instalment is being paid late:

  • on that instalment only,
  • from the due date of that instalment to the date of payment (or calculation).


1st instalment of £1,000 due 30 September 2010 (calculated and paid on time)

On 1 December 2011 you calculate the 2nd instalment of £1,000 which was due 30 September 2011. You should charge interest only on:

  • the tax to pay (£1,000) from 1 October 2011 to 1 December 2011.