State Secretary for Finance Vijlbrief, in a policy decision announced a scheme for deferred payment of inheritance tax for distressing situations. During this deferral period, the calculated recovery interest will be reduced to nil.
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The reason is the situation raised in a news report of a minor child who loses his parents. The estate consists (almost) exclusively of the parental home. In order to meet the tax obligations arising from the estate, the orphan must sell the home. The government considers such a situation undesirable.
Deferred payment
In the Recovery guide regulates from 1 July 2021 that a deferral of payment can be granted for inheritance tax for at least five years. The deferral will automatically expire at the end of the period for which it was granted. However, if the distressful situation continues, a new request for deferral of payment can be filed.
Conditions:
- the tax debtor submits a request for deferred payment;
- is a natural person;
- and payment of the tax, within the legal deadline, leads to a dire situation;
- finally, adequate security must be provided.
Deferral of payment can also be granted for taxes other than inheritance tax, to the extent that the tax assessment falls into the estate.
The receiver may waive the security if it would entail disproportionate consequences.
Distressing situation
What qualifies as a distressing situation depends on the facts and circumstances of the case. What is clear is that it must be on very obviously distressing situations.
The orphan's case outlined above qualifies as such because the orphan only inherits assets that are basic necessities of life (the parental home). Thereby, the minor child has no income or other assets from which the tax assessment can be paid. It is not expected that the child's income or assets will improve in the short term. Pledging the parental home is not possible because there is no income from which to meet the payment obligations associated with the loan.