Tax hike announced on unpaid ITH interest

usignuolo

i see in the papers today that the Treasury has snuck out some stealth changes to the tax on unpaid IHT interest (currently 0% as it is pegged to the bank rate). It is increasing the rate on unpaid IHT tax to 3% while reducing the interest it pays on overpaid IHT tax to 0.5%. it claims this is in the interests of "harmonisation".

The Treasury claims only 3% of households will pay IHT next year and so be affected. Does anyone know if this figure is remotely accurate or just plucked out of thin air to suit them?

pmcg01

Typical dirty Labour tactics.

which paper?

barak

pmcg01 wrote: »

Typical dirty Labour tactics.

which paper?

I saw it at the newsagent - main headline on the front page of the Telegraph.

http://www.telegraph.co.uk/finance/personalfinance/6030217/Inheritance-tax-interest-charges-increased.html

Pumpkinface_2

usignuolo wrote: »

The Treasury claims only 3% of households will pay IHT next year and so be affected. Does anyone know if this figure is remotely accurate or just plucked out of thin air to suit them?

It seems low, considering the house value would take so many people living in the south especially over the limit.

John_Pierpoint

:DPresumably only about 1 - 2 % of us die each year:eek:
I'm surprised that it has taken 6 months for HMRC to realise that having a rate of 0% on unpaid tax since last March, does not act as an incentive get on with the estate and pay the taxes.

Historical interest rates for unpaid tax are here:

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

I thoroughly agree with the observations about the difference between 0.5% & 3% as I'm in the situation of having almost certainly overpaid the total tax (Shares are well down in value since this time last year, what the house is worth is anyone's guess. The one a few doors down started at 460K and has just sold (?) for 415K. - Property prices are up to the banks; they are reluctant to give big mortgages on a falling asset price.).

If someone dies owning more than 325K and it is all in difficult to sell assets, like property, then they have been mismanaging their affairs.

I suppose that with the government hard at work borrowing (or printing?) about 3K per person this year, the odd 10 million is a case of "every little helps" to pay down our debts?.