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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Assessing: repayments: simple cases

In a simple case where there has been only one previous calculation, you can usually calculate the amount of interest repayable as follows:

Interest repayable = (tax repayable ( total interest paid) ÷ total tax paid (before repayment)

If no interest was paid, there is none to repay.

Example

  • On IHT400 - Tax paid = £26,800; interest = £23.50
  • tax of £10,000 is now repayable

Using the formula shown above the tax repayable is:

  • (£10,000 ( £23.50) ÷ £26,800 = £8.77
  • Total repayment = £10,000 (tax) + £8.77 (interest) = £10,008.77