IHTM31612 - 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