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Coronavirus: suggestion to extend the exemption from IHT to front line workers

April 13, 2020

A few days ago, I posted the text of a letter I have sent to the Chancellor.

Letter to the Chancellor

Attached here is a pdf of the letter itself (with one change, being changing his email address from his Constituency one to his 11 Downing Street one).

Inheritance Tax exemption for front line workers re coronavirus

Examples

I have also now written a few examples of why the exemption might help some front-line workers:

low net assets John, a soldier, dies with an estate below the Inheritance Tax threshold; the present exemption has no effect, not being needed.

married exemption Ann, a paramedic, married to Alan dies with a will leaving her estate to Alan; the present exemption has no effect, not being needed because of the exemption given to legacies to spouses and civil partners.

no valid will  Ahmed, a pilot, married to Saadia, dies intestate. Saadia receives part of Ahmed’s estate, and this part attracts exemption. But other parts pass by the rules of intestacy to other family members, and Inheritance Tax would be due, except for the armed forces exemption.

cohabiting siblings Jill, a police sergeant, has always lived with her brother Jack; she owns their home. She died having been attacked at work; her will leaves the house to Jack. Inheritance Tax would have been due, causing Jack to have to sell the house, had it not been for the armed forces exemption.

life insurance not in trust Neil and Lynne live together. Neil, an ambulance driver, dies during the course of attending an accident. Lynne thought that Neil’s estate was too small to be within the charge to Inheritance tax. Alas, like the majority of people (see footnote) the life assurance Neil had taken out was not written in trust and so his estate would have had to pay Inheritance Tax, where it not for the ‘armed forces’ exemption.

living together  Frankie and Johnny live together, and felt no need to get married. Frankie, a naval officer, dies in a diving accident. Inheritance Tax would have been payable except for the armed forces exemption.

NHS, Hospice and other front-line workers

There are Ahmeds, Jills, Frankies and Neils in the NHS, at hospices and in other front-line work. It would be a relatively easy amendment to the armed forces exemption- last changed in 2015 to bring in emergency personnel- to exempt them; relieving hardship for a few, and thanking all who day in, day out, put themselves at risk for us.

In summary

The exemption will help very few; it won’t be needed for many. But if it helps a few, or just one person who died trying to help others, isn’t it justified?

 

From → Taxation

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