IHT charges upped to 3%

Charges on inheritance tax (IHT) payments made after the six month deadline are increasing, the Treasury has announced.

HM Revenue & Customs (HMRC) says the rate will change to 2.5% above the Bank of England base rate from next month, increasing the current level of 0.5% to 3%.

IHT is usually paid on an estate valued above the current threshold of £325,000 when somebody dies.

HMRC predicts 12,000 estates will pay IHT in the tax year ending 2010 and these new rules affect those who fail to pay it within six months after the end of the month in which the deceased died.