ACCA Advanced Taxation (ATX) Practice Exam

What is the deadline for paying Inheritance Tax after death?

1. Six months from the date of death

2. One year after the date of death

3. Three months from the end of the month of death

4. Delivery of estate accounts within one month

The correct answer is: Six months from the date of death

The deadline for paying Inheritance Tax is six months from the date of death. This timeframe is established by tax regulations to ensure that the tax is settled promptly, allowing the estate to be administered efficiently. If the Inheritance Tax is not paid within this period, interest may start to accrue on any unpaid amount, which can increase the overall liability for the estate. While it is important for the estate to be settled and any tax liabilities to be addressed, options that suggest longer periods such as one year or specific calculations based on the end of the month do not apply to the payment deadline directly. Additionally, the delivery of estate accounts within one month relates to reporting but does not reflect the payment obligation for the Inheritance Tax itself. Hence, the six-month deadline aligns with the legal requirements set forth, underscoring the need for timely tax compliance following a person's death.