Tax interest is also payable if inheritance tax is paid before the assessment is due.
The inheritance tax return must be filed within eight months of death. If the tax return is filed later, the Inland Revenue will charge tax interest on the inheritance tax due. The interest term starts to run on the day after the aforementioned 8 months have passed. And this term ends 6 weeks after the date of the (preliminary) assessment of inheritance tax. Maximum tax interest is calculated over 19 weeks after the date on which the tax return is received by the Tax Authorities (interest stop).
Example
If the testator dies on 1 October 2023, the inheritance tax return must be filed by 31 May 2024. If the tax authorities have received the return by 31 May 2024, no tax interest will be charged.
If the tax return is filed on 30 June 2024, the Tax Administration will charge tax interest on the inheritance tax due, which is calculated from 1 June 2024. If the (provisional) assessment is imposed with the date of 1 August 2024, interest will be calculated until 12 September 2024 (the tax must be paid within 6 weeks, i.e. by 12 September 2024).
Would the (provisional) assessment have been dated on 30 November 2024, the Tax Administration will calculate tax interest up to 10 November 2024 (19 weeks after 30 June 2024).
Early payment
In a case before Zeeland-West Brabant District Court, the heir paid the inheritance tax on the date the assessment notice was dated (the assessment notice usually arrives in the letterbox a few days before the date). The court ruled that the tax authorities were nevertheless justified (because this is in accordance with the legal rules) in charging tax interest on the 6 weeks after the date of the assessment notice.
The heir raises further arguments before the court, all to no avail. The fact that the Tax Administration granted a postponement for filing the inheritance tax return does not mean that the heir was entitled to trust that no tax interest would be charged. Similarly, the argument that it was not possible to file the tax return earlier (because one had to wait for data from the United States) does not mean that no (or less) tax interest would be charged.
Provisional assessment
In the context of inheritance tax, it is also possible to request the Tax Authorities to impose a provisional assessment. If that request is made within 8 months of the death, the Tax Authorities will not charge tax interest on the amount due on the provisional assessment. Note that the inheritance tax must then actually be paid, within 6 weeks after the date of the provisional assessment.