When is Inheritance Tax due, and how is late payment interest calculated?

How the six-month deadline is counted

GOV.UK puts the rule in one line: you must pay Inheritance Tax by the end of the sixth month after the person died, and its example is a death in January with payment due by 31 July. HMRC's Inheritance Tax Manual states the same rule in the wording of the Inheritance Tax Act 1984, section 226: the tax is due six months after the end of the month in which the death occurs.

The practical point is that the clock runs to the end of a month, not to a matching date. A death on 14 January and a death on 31 January share the same deadline, 31 July. A death on 31 August runs to the last day of the following February. HMRC's own IHT400 interest helpsheet uses a March death as its example and starts interest on 1 October of the same year, which only works if the deadline is 30 September.

This payment deadline is separate from the deadline for the paperwork. GOV.UK says form IHT400, the full Inheritance Tax account, must be submitted within 12 months of the death and before you apply for probate. Sending the form late does not move the payment date, and sending it early does not stop interest on tax you have not paid.

When interest starts and when it stops

HMRC's Inheritance Tax Manual (IHTM30361) gives the general rule: interest runs from the day after the due date to the date of payment. With a 31 July deadline, the first day of interest is 1 August. The IHT400 helpsheet counts the days from the start date to the payment date including both of those days.

The date that matters is when the money reaches HMRC. GOV.UK says Faster Payments usually arrive the same or next day, including weekends and bank holidays, CHAPS usually the same working day if you pay within your bank's processing times, and Bacs usually takes 3 working days. A Bacs payment started on the deadline itself is likely to land after it.

If you know tax will be owed but not the final figure, GOV.UK allows a payment on account, an early payment before the exact amount is known. If you end up paying more than the final bill, HMRC repays the difference with interest on the overpayment.

The current rate, and how often it moves

HMRC sets late payment interest at the Bank of England base rate plus 4 percentage points. That formula has applied since 6 April 2025; before then it was base rate plus 2.5 points. HMRC's published table shows the rate at 8.50% from 6 April 2025, 8.25% from 28 May 2025, 8.00% from 27 August 2025 and 7.75% from 9 January 2026.

The Bank of England held Bank Rate at 3.75% on 17 September 2026, which keeps the late payment rate at 7.75%. Its next decision was due on 5 November 2026. Because the rate follows Bank Rate, any article quoting a single figure, this one included, is a snapshot. The 7.25% figure that still appears in some older pieces, for example, was the rate from 26 November 2024 to 24 February 2025. Check HMRC's interest rates page on the day you calculate.

Working out the interest yourself

HMRC's IHT400 helpsheet gives the formula: tax due, multiplied by the interest rate, multiplied by the number of days, divided by 366. Its worked example is £5,000 of tax at 4% for 75 days, from 1 October to 14 December, which comes to £40.98.

Here is the same method at today's rate. Someone dies on 14 January 2026, so the tax is due by 31 July 2026. The executors pay £84,000 on 20 August. Interest runs from 1 August to 20 August, which is 20 days counting both ends: £84,000 × 7.75% × 20 ÷ 366 = £355.74. Each extra day adds about £17.79.

If the rate changes while tax is unpaid, the helpsheet splits the period and works out each part at its own rate before adding them together. The interest is worked out on the tax itself; there is no step that adds earlier interest back in. HMRC also publishes an Inheritance Tax interest calculator among its tools and calculators on GOV.UK, which is the easiest way to check a figure.

Instalments change the picture for some assets

GOV.UK lets executors pay the tax on things that may take time to sell, such as land and buildings that are not being sold, in equal yearly instalments over 10 years. The first instalment is due at the same six-month date, and later instalments fall due on the same date each year.

There is no interest on the first instalment unless it is paid late. HMRC's helpsheet explains that, for later instalments, interest is normally charged on the unpaid balance as well, although instalments on some assets, such as a business or land that qualifies for Agricultural Relief, are interest-free as long as each one is paid on time.

Common mistakes

Counting six months from the date of death. The deadline is the end of the sixth month after the month of death. A death early in a month leaves close to seven months; a death on the last day of a month leaves six.

Waiting for probate before paying. GOV.UK says you will normally have to start paying Inheritance Tax before you are granted probate, so the grant cannot be the trigger for payment.

Leaving the reference number until the last month. GOV.UK says you need an Inheritance Tax reference number from HMRC at least 3 weeks before you make a payment.

Using an old rate. The rate changed four times between April 2025 and January 2026. If you want the date and a running figure in one place, ProbateClock shows the six-month deadline from the date of death and, once it passes, adds one day of interest at a time on the estimate you enter, with the rate and the date it was checked shown underneath.

This guide summarises GOV.UK and HMRC guidance as checked on 1 October 2026. It is not tax or legal advice. Rates and rules change, and for a complicated estate it is usual to speak to HMRC or a solicitor.

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