Consequences for late payment or non-payment of Estate Duty
For deaths which occurred on or after 1 Jan 2005 and before 15 Feb 2008, the executor, administrator, or accountable person is given 30 days from the date of the Notice of Assessment (NOA) to pay the unpaid estate duty and interest.
IRAS may take the following enforcement actions if you fail to pay by the due date:
- Impose late payment penalties
- Take legal action
Late payment penalty
A late payment penalty of 6% per year will be imposed on the unpaid estate duty and/or interest for the first completed month if payment is not made by the NOA due date.
If the estate duty and/or interest remain unpaid, an additional penalty of 1% per year of the unpaid amount will be imposed for each subsequent completed month that the duty and/or the interest remain unpaid, subject to a maximum of 12% per year as shown in the table below.
| Period | Date of Death From 1 Jan 2005 to 14 Feb 2008 |
|---|---|
| 30 days after the date of NOA or 6 months after the date of death, whichever is later | 6% |
| One month after the imposition of the 6% penalty per year | 7% |
| For each completed month that duty/interest remains unpaid | 8% (Incremental of 1% up to maximum of 12% per year) |
The following examples illustrate how late payment penalties are computed for different scenarios.
Example 1: Duty paid late but before 1 completed month from NOA due date
No penalty will be imposed as payment was made within 1 month from the NOA due date.
Example 2: Payment was made after 9 completed months from NOA due date
The accountable person received an NOA dated 1 Jul 2005, and the duty payable was $100,000. The NOA due date was 31 Jul 2005. The accountable person eventually made payment on 15 May 2006.
| Period | Penalty Imposed |
|---|---|
| 1 Aug – 1 Sep 2005 | ($100,000 x 6% x 1/12) = $500.00 |
| 2 Sep – 2 Oct 2005 | {$100,000 x (6% +1%) x 1/12} = $583.33 |
| 3 Oct – 3 Nov 2005 | {$100,000 x (6% +2%) x 1/12} = $666.67 |
| 4 Nov – 4 Dec 2005 | {$100,000 x (6% +3%) x 1/12} = $750.00 |
| 5 Dec 2005 – 5 Jan 2006 | {$100,000 x (6% +4%) x 1/12} = $833.33 |
| 6 Jan – 6 Feb 2006 | {$100,000 x (6% +5%) x 1/12} = $916.67 |
| 7 Feb – 7 Mar 2006* | {$100,000 x (6% +6%) x 1/12} = $1,000.00 |
| 8 Mar – 8 Apr 2006 | {$100,000 x (6% +6%) x 1/12} = $1,000.00 |
| 9 Apr – 9 May 2006 | {$100,000 x (6% +6%) x 1/12} = $1,000.00 |
| Total penalty | $7,250 |
*There will be no further penalty increment after the 7th completed month as the rate of penalty is subject to maximum of 12% per year.
The total amount paid (duty of $100,000 + total penalty of $7,250) was $107,250.