The proposed inheritance tax (IHT) relief available to members of the emergency services has been extended to include the deaths of constables and members of the armed forces who die as a result of being “deliberately targeted” because of their position as police officer or member of the armed forces.
The Finance Bill (2015) stated that the additional proposal will widen the scope of available relief, making it important for advisers to be aware of the changes that could impact any clients included in the emergency services personnel criteria.
The changes are effective for deaths that occurred on or after 19 March 2014, meaning that they apply now, even if the death occurred before the new legislation was put in place.
However, clarification of the IHT relief for emergency services personnel could make the area more complicated, writes Peter Nellist in the April issue of Money Management.
Mr Nellist said, “None of the current difficulties with the original relief have been addressed. The major point that the drafting overlooks is that members of the emergency services, particularly police officers, are in many ways on full time active service; their theatre of war is in the UK.
“There are many tasks undertaken by members of the emergency services that can suddenly become dangerous. Similarly for members of the armed services there are duties that can be dangerous and fatal when not on active service.”
Due to the breadth of the legislation, advisers should first check if the client has ever suffered a serious injury or disease, or has had exposure to potentially dangerous circumstances. Although the death must have occurred on or after 19 March 2014 in order for the relief to apply, the circumstances that gave rise to the injury or disease that caused the death could have began earlier.
Advisers should check whether their client has ever been an emergency responder, if there is a possibility of a link to an emergency responder (such as a spouse or civil partner), inform the client of the IHT implications if there is a link, to fully document the client’s experiences, and to ask lawyers for any specialist legal advice on this complex legislation.
