UK government attacks bereaved families
The loss of a loved one can be a heavy burden for anybody to carry in the UK and finance is unlikely to be the first thing on your mind. However the UK government has increased the fine for late payment of inheritance tax to 3% from next month. Some people may be aware that inheritance tax payments are due to be paid within six months of the person's death even though in some cases it can take longer to clarify their total estate and the amount of tax due.
Historically the penalty for late payment of inheritance tax liabilities has been interest linked to the base rate. However, as we all know, UK base rates have fallen significantly over the last two years and now stand at 0.5%. While some people may argue that the increase to 3% is fair, when you consider that interest added to over payment of taxes by individuals or companies in the UK only attracts an interest rate of 0.5%, the situation looks a little different.
It seems as though the UK authorities are intent on increasing their income "by hook or by crook", increasing interest penalties where they can and reducing their obligations where mistakes have been made. Whether this system is fair is open to debate because ultimately everybody in the UK pays taxes when they are alive and potentially larger taxes when they die!
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