CH143380 - Interest: Late payment interest: special provisions: special provisions for start dates: person dies - example
You must check whether, and from which date, the FA 2009 interest rules apply to the tax or duty you are dealing with. See CH140160 for full details.
Michael was due to pay the balancing payment of his 2013-14 income tax liability on 31 January 2023, but, unfortunately, Michael passed away on 1 January 2023. The executors of Michael’s estate were unable to pay the tax by the due date because they had not obtained probate. Probate was granted on 1 May 2023 and they made payment on 20 May 2023.
The late payment interest start date is the later of
- the normal late payment interest start date, which is 31 January 2023 in this example, and
- the day after 30 days that start from the grant of probate or letters of administration, or (in Scotland) the grant of confirmation, which is 31 May 2023.
In this example, late payment interest will not be charged because the executors paid the tax on 20 May 2023, which is within 30 days of probate being granted.
VAT example
Anwar was due to pay his VAT liability of £50,000 for the quarter ending 30 June 2023 on 7 August but passed away on 3 July 2023. The executors of Anwar’s estate couldn’t pay the tax by the due date because they had not obtained probate. Probate was granted 16 September 2023 and they made payment on 30 October. Late payment interest will be charged as the executors paid on 30 October 2023, which is more than 30 days after probate was granted. Late payment interest is charged from the late payment interest start date of 16 October 2023 until the late payment interest end date of 30 October 2023.