Section 75: Inheritance Tax: Exemption for Emergency Service Personnel Etc
Summary
1.This section amends the inheritance tax (IHT) legislation to provide that the estates of: emergency service personnel, armed forces personnel and humanitarian aid workers who die as a result of responding to an emergency; and police constables and armed service personnel who die as a result of being attacked due to their status, will be exempt from IHT.
2.It also provides that this exemption will include any additional IHT due on death for lifetime transfers and potentially exempt transfers. The amendments made by this section have effect in relation to deaths occurring on or after 19 March 2014.
Details of the Section
3.Subsection (1) provides for various amendments to be made to the Inheritance Taxes Act 1984 (IHTA).
4.Subsection (2) inserts a new section 153A. New section 153A sets out the conditions that must be met for the estates of emergency service personnel and humanitarian aid workers (emergency responders) to be exempt from IHT. It determines the circumstances in which the exemption applies, for example, those likely to cause the death of a person or serious harm to the environment. Other emergency circumstances covered include serious injury or illness of a person or an animal. It also defines what qualifies as an emergency, to whom the exemption applies and provides that it is immaterial whether the individual is paid or unpaid. The section also provides that regulations may extend the definition of emergency responders.
5.Subsection (3) amends section 154 IHTA to provide that where armed service personnel die while responding to an emergency, or their death is hastened as a result of injury or illness arising from that emergency, then their estates will be exempt from IHT. It also defines the nature of the exemption, and inserts a reference to the definition of emergency in section 153A IHTA.
6.Subsection (4) inserts a new section 155A. New section 155A sets out the conditions to be met for the estates of police constables and armed service personnel to be exempt from IHT. It determines the circumstances in which the exemption applies, the nature of the exemption and to whom it applies. It provides that it is immaterial whether the individual was acting in the course of his duties when attacked and provides a definition of service personnel
7.New section 155A will not apply where the individual’s death occurs as a result of responding to emergency circumstances which would be covered under new section 153A, or as a result of being on active service which would be covered under section 154 IHTA
8.The effect of these changes will be that where a police constable or member of the armed services dies as a result of their status, or a member of the emergency services, or the armed services, or a humanitarian aid worker dies as a result of responding to an emergency, then their estate will be exempt from IHT. Any additional IHT due on death for lifetime transfers (transfers that are immediately chargeable to IHT) and potentially exempt transfers (lifetime transfers of value that meet certain conditions) will not be payable.
9.Subsection (5) provides that these amendments have effect in relation to deaths occurring on or after 19 March 2014.
Background Note
10.At Budget 2014 the government announced its intention to introduce IHT exemptions for members of the emergency services in line with the existing exemption for armed service personnel who die in the line of duty or whose death is hastened by an injury incurred in the line of duty. At the Autumn Statement it announced its further intention to introduce a similar exemption for police constables and armed services personnel who die as result of being attacked due to their professional status.
11.The amendments made by this section will provide that the estates of such workers will be exempt from IHT. Regulations may extend the definition of emergency worker, if necessary. The changes also provide for circumstances where armed forces personnel die as a result of responding to emergencies.
