IHTM30362 | Interest period: instalments without interest relief
From HM Revenue & Customs · Inheritance Tax Manual
In most circumstances instalments () of tax are without interest relief, i.e. interest on the unpaid tax is added to each instalment and paid accordingly ().
Thus in the case of the first instalment interest is charged
on that instalment only
from the due date to the date of payment.
However when the second instalment is assessed () interest is charged
on that instalment only from its due date to the date of payment (in practice, date of assessment)
and
on the whole of the tax outstanding between the due date of the first instalment and the due date of the second (i.e. for one year).