Death of armed forces and emergency service personnel

Produced by Tolley

The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Death of armed forces and emergency service personnel
  • Introduction
  • Cause of death
  • Exemption from inheritance tax
  • Conditions for the armed forces exemption
  • How to apply for the armed forces exemption
  • Interaction of estate duty and the exemption
  • Conditions for the emergency services exemption
  • How to apply for the emergency services exemption
  • Conditions for personnel targeted because of their status
  • More...

Death of armed forces and emergency service personnel

Introduction

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:

  1. broaden the circumstances to which the armed forces exemption applies

  2. 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:

  1. death on active service of armed forces personnel

  2. death on active service of emergency services personnel

  3. 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.

Cause of death

The reliefs apply where a person dies from either:

  1. an injury sustained, accident occurring or disease contracted at a time when certain conditions were satisfied

  2. 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.

Exemption from inheritance tax

The exemption applies to the estate charge and the additional charge arising on death. For each category, the legislation specifies that:

  1. a potentially exempt transfer (PET) made in the seven years before death doesnot become chargeable because of the death

  2. the charge on the death estate doesnot apply

  3. no additional tax becomes due on a chargeable lifetime transfer

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