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HMRC internal manual

Inheritance Tax Manual

Instalment offers: early settlement

A taxpayer may want to pay off the balance, or make substantial cash payments, before the instalment arrangements finish. This should be encouraged. If you get asked about this when negotiating the penalty you should explain that the Board’s practice in such cases is to allow a proportionate reduction of any increase (IHTM36253) made for payments by instalments, the precise amount to depend on the circumstances at therelevant time.

If the taxpayer wants to know what they would have to pay to clear their liability or whateffect a cash payment would have you should

  • find out what payments have been made to date, and
  • refer the papers, through your SO manager and the Penalty Portfolio Holder, to Tax Administration, Litigation and Advice (TALA) (IHTM36361).