Interest is charged on the first instalment from the due date of payment until the actual date of payment. Subsequent instalments may or may not be ‘interest-free’, under IHTA 1984, s. 234.

Interest-free instalments

Where instalments are interest-free, this means that no interest is payable on the instalments until they fall due. Once an instalment falls due, interest is payable on that instalment only, until it is paid. Thus, if all instalments are paid as they fall due, no interest ever becomes payable. Instalments on the following types of property are interest-free:

shares and securities other than those listed below;

business or interest in a business;

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