Capital Transfer Tax Act 1984

Interest

233 Interest on unpaid tax

(1) If—

(a) an amount of tax charged on the value transferred by a chargeable transfer made after 5th April and before 1st October in any year and otherwise than on death remains unpaid after the end of the period ending with April in the next year, or

(b) an amount of tax charged on the value transferred by any other chargeable transfer remains unpaid after the end of the period of six months beginning with the end of the month in which the chargeable transfer was made, or

(c) an amount of tax chargeable under section 32, 79(3) or 126 above or under Schedule 5 to this Act remains unpaid after the end of the period of six months beginning with the end of the month in which the event occasioning the charge occurs,

it shall carry interest from the end of that period at the rate applicable under subsection (2) below.

(2) The rate referred to in subsection (1) above is—

(a) if the chargeable transfer was made on death, 6 per cent.;

(b) in any other case, 8 per cent.;

or (in either case) such rate as the Treasury may from time to time by order made by statutory instrument prescribe.

(3) Interest payable under this section shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.

(4) A statutory instrument made under this section shall be subject to annulment in pursuance of a resolution of the House of Commons.

234 Interest on instalments

(1) Where tax payable on the value transferred by a chargeable transfer—

(a) is payable by instalments under section 227 above and is attributable to the value of any shares, securities, business or interest in a business, or to value treated as reduced under Chapter II of Part V of this Act, or

(b) is payable by instalments under section 229 above,

it shall, for the purposes of any interest to be added to each instalment, be treated as carrying interest from the date at which the instalment is payable.

(2) Subsection (1) above shall not apply to tax attributable to the value of shares or securities of a company falling within paragraph (a) of subsection (3) below (not being tax attributable to value treated as reduced under Chapter II of Part V of this Act) unless it also falls within paragraph (b) or (c) of that subsection.

(3) The companies referred to in subsection (2) above are—

(a) any company whose business consists wholly or mainly of one or more of the following, that is to say, dealing in securities, stocks or shares, land or buildings, or making or holding investments ;

(b) any company whose business consists wholly or mainly in being a holding company (within the meaning of the [1948 c. 38.] Companies Act 1948) of one or more companies not falling within paragraph (a) above ;

(c) any company whose business is that of a jobber (as defined in section 477 of the Taxes Act) or discount house and is carried on in the United Kingdom.

235 Interest on overpaid tax

(1) Any repayment of an amount paid in excess of a liability for tax or for interest on tax shall carry interest from the date on which the payment was made at the same rate as that at which the tax, if outstanding, would have carried interest.

(2) Interest paid under this section shall not constitute income for any tax purposes.

236 Special cases

(1) Section 233 above shall apply in relation to—

(a) the amount by which tax chargeable on the value transferred by a chargeable transfer made within three years of the transferor's death exceeds what it would have been had the transferor died more than three years after the transfer, and

(b) any tax for which, by virtue of section 206 above, only a political party is liable,

as if the chargeable transfer had been made on the death of the transferor.

(2) Tax overpaid or underpaid in consequence of—

(a) section 146(1) above, or section 19(1) of the [1975 c. 63.] Inheritance (Provision for Family and Dependants) Act 1975, or

(b) the corresponding provision of the [S.I. 1979/924 (N.I. 8).] Inheritance (Provision for Family and Dependants) (Northern Ireland) Order 1979,

shall not carry interest for any period before the order there mentioned is made.

(3) Tax repayable on a claim under section 146(2), 149 or 150 above shall carry interest (which shall not constitute income for any tax purposes) at the rate for the time being applicable under section 233(2)(b) above from the date on which the claim is made.

(4) Tax repayable under section 147(2) above shall carry interest (which shall not constitute income for any tax purposes) at the rate for the time being applicable under section 233(2)(a) above from the date on which the tax was paid; and tax charged by virtue of section 147(4) above shall carry interest at that rate as if section 233(1)(b) above had applied.