The guidance notes to help customers to complete form IHT205 (2006) have recently been revised. The revised guidance is available at http://www.hmrc.gov.uk/cto/forms/iht206-2006-1.pdf.

The interest rate applicable to unpaid Inheritance Tax has been changed from 5 per cent to 4 per cent from 6 January 2007. HMRC specifically state that interest is not a penalty, it compensates the Exchequer for the delay in receiving the money due to it. Interest on an overpayment will be paid at the same rate as HMRC would charge on an underpayment.

Form IHT210A has been revised to show the change in the rate of interest from 6 January 2008.