Electing to pay by 10 year instalments - how is the "property part" calculated?

Blox55

How is the "property part" of the inheritance tax calculated if the IHT is elected to pay in 10 years instalments on UK property? Obviously there is a tax-free allowance, is it pro-rated across all assets? Or all other assets have to pay 40% tax?

I have the following situation:

1. UK property - will be sold by administrators, would like to pay in instalments
2. Foreign property - to be transferred to beneficiaries (presume this means IHT tax needs to be paid straight away?)
3. Bank accounts - IHT tax will be paid straight away

Put this way, the IHT tax allowance covers almost all of UK property, so unless the tax-free allowance can be pro-rated, it appears there is no benefit by spreading the tax over 10 years.

So my question is whether the tax-free allowance is pro-rated or not, i.e. how is the part that can be paid over 10 years calculated?

Blox55

I will answer my own question as I found the answer, to benefit others:

When paying in instalments, the IHT on property to be paid in instalments is calculated in proportion of the value of the property to the value of the total estate.

So for example (not my real numbers) if the estate is 1,500,000 the property is £900,000 and the tax payable is £200,000 then if the property part of IHT is elected to be paid by instalments, then first calculate the portion of property in the whole estate (900,000/1,500,000 = 60%) and then apply this percentage to the IHT payable (£200,000 x 60% = £120,000)

This means that £120,000 can be paid in instalments and £80,000 (+ first rate of instalment of £12,000) has to be paid straight away.