The Treasury has published its response to the House of Lords Economic Affairs Committee report on inheritance tax, accepting nine recommendations and partially accepting 31, but rejecting proposals to introduce a statutory safe harbour from late payment interest and to extend the deadline for paying IHT on pension assets to 12 months.
The Lords had argued that personal representatives need a more realistic timeframe to meet IHT liabilities while pension administrators update their processes, suggesting a safe harbour where delays were outside their control.
However, the government confirmed it will not change the current rules, stating that IHT remains due six months after death, after which late payment interest applies.
Commenting on the decision, Rachel Vahey described it as disappointing, saying the government is unwilling to reconsider the six-month deadline.