NHS workers and other emergency service workers who die from Covid-19 are potentially exempt from the payment of Inheritance Tax on their estates, following a government announcement in April.
Interestingly, this change came about as a result of Allan Beardsworth, a former accountant, writing a letter to the Chancellor in April highlighting the ‘unfairness’ of inheritance tax for those killed whilst ‘in the line of duty’.

The exemption is an extension to current legislation that exempts emergency personnel responding to emergency circumstances from being liable to Inheritance Tax on their death. Emergency personnel refers to those working in the medical, ambulance or paramedic services.
Originally the legislation only applied to members of the armed services whose deaths are caused or hastened by an injury whilst on active service. This was extended in 2015 to cover emergency personnel.

However, the exemption is not automatic and must be manually claimed by the Executors following a correct reporting of the cause of death on the death certificate.

Commenting on this, Andrew Marshall, an expert in wills and inheritance planning said; “This little-known exemption has rightly been extended to emergency workers and Covid-19. We believe that there may be a number of people who, due to the need to actually ‘apply’ for the exemption, may have missed out in the past few years where death may have met the requirements. The good news is that there is no deadline for applying, and claims may be applied for retroactively, meaning any relevant overpayment of Inheritance Tax should be refunded following an application.”

There is also a misconception that only wealthy doctors and consultants with large assets and bank accounts will benefit from the exemption. However, in our experience, there are many cases where emergency workers have estates beyond their personal tax-free allowances, and others who may not be eligible for the Residence and Transferable Nil-Rate Bands. Additionally, with the return of many retired NHS workers to the frontline in recent weeks, the need to discuss or implement lifetime planning arrangements has increased.

We strongly recommend that the families of frontline NHS workers and those who work in the emergency review their position to see if they are eligible for the exemption and seek professional guidance in order to claim it.

To make this easier we are offering a free initial consultation with our experienced team to help you understand if the exemption may apply to you.

Simply get in touch to book your initial consultation.

Our contributor

Andrew Marshall

Wills and Probate Executive

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