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HMRC internal manual

Inheritance Tax Manual

Negotiating a penalty: request for time to pay

You should normally seek payment of the penalty within 30 days of the date of the letter of acceptance. Exceptionally, you may allow up to 6 months provided you are satisfied that the taxpayer needs further time to obtain the funds and it would secure a cash offer.

If payment depends on an uncertain event, such as the sale of a property, a reasonable time, not exceeding 6 months should be allowed for the sale provided you have evidence that the property is genuinely on the market. At the end of the 6 months, the position should be reviewed and if it appears unlikely that the sale will take place in the near future, you should follow the same procedures as when culpability is disputed (IHTM36233) for reviewing and referring the case for penalty proceedings.

If the taxpayer needs a deferment of more than 6 months you should increase the expected offer (IHTM36174) in the same way as for an instalment offer (IHTM36251).