inheritance tax rate still at 3%

Berty

I'm paying inheritance tax and I've been looking at the interest rate which is 3% http://www.hmrc.gov.uk/rates/iht-interest-rates.htm
The base rate has no dropped to 1.5% and yet the payment for inheritance tax still remains the same.
Am I right in thinking this inheritance tax is not linked to the base rate?
Will it come down in line?

AJ1982

Thats only a charge on Inheritance Tax not paid within 6 months, which therefore becomes a loan to the IR... The main inheritance tax of 40% for anything over the threshold (£312k) remains in line with the government / elections

Berty

Thanks for the info.
I've paid the first instalment which is set over a 10 year period as I am keeping the house which had no interest applied. Next year I have to pay so much again and the interest rate is 3% at the moment plus the short period of 4%.
Its this interest rate that I wondered about. I am hoping they bring it down.

5fEtsd9Hs1LOR3SQftY9

That page seems not to be up-to-date. A rate of 2% was introduced on 6 Jan 2009, see http://www.hmrc.gov.uk/rates/interest-late.htm#it.

The rate always seems to be set a little below the Bank of England Rate, and takes a few weeks to follow a move. Most of the moves seem to be in 1% jumps. My guess it will stay at 2% for at least a month, but may go down to 1% even if there is no further cut in base rate next month.

Mikeyorks

It does have a vague attachment to Base rate ..... but I think only Govt actuaries could tell you how they model it. You can clearly see it doesn't have a direct correlation .... so the 0.5% from today won't be appearing centre stage soon.

There's also a relationship from Base to 'interest on tax paid late' .... and you would think it would be similar? But (for IT) it was only reduced 6th Jan .... down to 4.5% ..... so be grateful you're not paying that?

http://www.hmrc.gov.uk/rates/interest-late.htm

But there must be a rationale that those who pay their Income (and related taxes) late have a greater control, for the most part, than those where IHT in instalments is granted? Hence the 'lighter' charge?

Mikeyorks

5fEtsd9Hs1LOR3SQftY9 wrote: »

That page seems not to be up-to-date.

That will teach me to rely upon someone else's link? However doesn't essentially change what I was keying as you posted.

Berty

Thanks 5fEtsd9Hs1LOR3SQftY9 for the info and the link. Typical gov site that I found the page not updated
Thats made me happy now. I have savings accounts that off set the payments so every penny helps.