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Passing on... Inheritance Tax exemption extended to emergency services personnel and humanitarian aid workers

13th Apr 2015
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Passing on…

Inheritance Tax exemption extended to emergency services personnel and humanitarian aid workers

The Government announced in the Autumn Statement 2014 the extension of the existing IHT exemption for members of the armed forces whose death is caused or hastened by injury while on active service to members of the emergency services and humanitarian aid workers responding to emergency circumstances. It will have effect for deaths on or after 19 March 2014.

Although full details have not yet been made available of what exactly will constitute emergency circumstances, it appears that the Government consider that HMRC will oversee any claims that do not fall under the remit of the MoD.

This relief applies both to those on active service or who later die from their injuries, and the injury or disease needs only to have contributed to death; it does not have to be the primary cause.

It will fall, however, to families and their advisers to keep in mind the relief. For example, the death of a former serviceman or emergency worker injured and invalided out of their service twenty years ago may have been caused by the injury suffered on duty.

Inheritance Tax exemption for medals and other awards

At the same time, the Government extended the existing IHT exemption for medals and other decorations that are awarded for valour or gallantry. From 3 December 2014 it will apply to all decorations and medals awarded to the armed services or emergency services personnel, and to awards made by the Crown for achievements and service in public life. 

These qualify as excluded property from IHT providing they have not been purchased by the deceased.

Just how valuable an exemption this will be is dependent on the value of the medals or award themselves. Understandably a Victoria Cross or George Cross can command considerable prices.  Undoubtedly the prices of medals associated with famous figures or awarded for acts of special bravery command a considerable premium, so this proposal may prove to be a very welcome saving to some estates.

Click here to download a PDF of this tax tip

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