The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
There has been a long-standing exemption from inheritance tax (and earlier versions of death duties) for the estates of armed forces personnel who die in conflict or as a result of injuries sustained in the line of duty. The exemption was extended in Finance Act 2015 to:
broaden the circumstances to which the armed forces exemption applies
include emergency service personnel and humanitarian aid workers who die in the line of duty
IHTA 1984, s 154
There are now three categories of exemption:
death on active service of armed forces personnel
death on active service of emergency services personnel
death of police constables or armed forces personnel who are targeted because of their status
The qualifying conditions and means of application for the exemption are separately specified for each category as described below. However, in all three categories, the cause of death and the extent of the exemption are the same.
The reliefs apply where a person dies from either:
an injury sustained, accident occurring or disease contracted at a time when certain conditions were satisfied
a disease contracted at some previous time, the death being due to or hastened by the aggravation of the disease during a period when these conditions were satisfied
IHTA 1984, ss 153A(1), 154(1), 155A(1)
The original provisions relating to armed forces refer to a ‘wound inflicted’ instead of ‘injury sustained’. Where death is due to a wound (or injury), it need not be the only cause, the direct cause or the most important cause of death, provided that it is a cause.
The exemption applies to the estate charge and the additional charge arising on death. For each category, the legislation specifies that:
a potentially exempt transfer (PET) made in the seven years before death does not become chargeable because of the death
the charge on the death estate does not apply
no additional tax becomes due on a chargeable lifetime transfer (CLT) made in the seven years before
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