Is interest always charged on instalments?

For most assets, yes. Some business and agricultural assets attract interest-free instalments where the conditions are met.

Tax · 5 min read

Paying Inheritance Tax in instalments

Tax on land, buildings and certain business assets can be paid over ten annual instalments instead of in one lump sum before the grant. It is elected, not granted.

Written and reviewed by Ramani Gill, Founder & CEO — Solicitor, TEP, BA, LLM. Last reviewed 2026-08-19.

Qualifying assets

Land and buildings, including the family home
A business or an interest in a business
Shares giving control of a company
Certain unquoted shares

How it works

Point	Detail
Election	Made on the IHT400 by identifying the instalment assets
First instalment	Due six months after the end of the month of death
Number of instalments	Ten annual payments
Interest	Charged on the outstanding balance for most assets
Sale of the asset	The remaining tax and interest becomes payable immediately

Instalments end at the sale

If the house is sold in year two, the whole outstanding balance falls due out of the proceeds. Plan the sale and the tax together.

Doing this yourself?

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When it is the right choice

The estate is asset-rich and cash-poor
A beneficiary intends to keep the property long term
You need the grant quickly and cannot fund the full bill upfront

GOV.UK — Paying in yearly instalments

Common questions

Is interest always charged on instalments?: For most assets, yes. Some business and agricultural assets attract interest-free instalments where the conditions are met.

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