Firm Urges HMRC For Clarification On Emergency Personnel Exemption

A leading South East law film is urging HMRC to provide clarification on whether the estates of the NHS workers and other emergency personnel who have lost their lives due to the Corona virus will benefit from IHT exemption.

There are many cases where NHS staff and other key workers on the front line, who are in close proximity to those with the disease, have lost their lives whilst trying to save others.

The probate team at Thomson Snell & Passmore believe that those who have lost their lives in the line of duty should have their estate benefit under existing legislation to be IHT exempt. However, further guidance is needed from HMRC to clarify the scope and reach of this exemption.

Helen Stewart, head of probate at Thomson Snell & Passmore comments:

“Historically, the estates of members of the armed forces whose death can be attributed to or hastened by an injury or illness instigated whilst on active service have been exempt from Inheritance Tax.

“Legislation in recent years has modified and extended this exemption, so that it now applies to those who responded to “blue light” emergencies – including, amongst others, paramedics, police officers, and those engaged in humanitarian assistance. The extension is represented in s153A of the Inheritance Tax Act 1984.

“It also includes application to the estates of any person who dies from a disease contracted at a time when that person was responding to emergency circumstances in that person’s capacity as an emergency responder.

“The wording defining “emergency responders” is purposefully broad. Emergency responders can be voluntary (i.e. unpaid) and can include a person employed or engaged by a government, an international organisation or a charity in connection with the provision of humanitarian assistance.

“In this light, there are circa 750,000 NHS Volunteer Responders that have been engaged by the Royal Voluntary Service who could also be covered by the definition.

“In any case, the legislation permits the Government to extend the definition of ‘emergency responder’ by subsequent rulings – and in the circumstances, it would be wise for the Government to do so and incidentally clarify which estates benefit from the exemption more generally (in the Coronavirus context).

“The main difficulty in obtaining the exemption may be in showing that the emergency responder in question died because they contracted the virus at the time of response.

“In the normal course of seeking the exemption, there is guidance on how to show that an individual died at the time of response (IHTM11295) – but questions remain as to how this might be tackled by HMRC in light of the pandemic.

“There is legislation in place to exempt estates of qualifying emergency responders from IHT. We believe this could be applied to the estates of emergency responders who died responding to the Coronavirus pandemic – though the process of doing so could be made simpler if HMRC clarified the position in the wake of the pandemic.

“We understand that for many of the families of Coronavirus victims, dealing with the administration of the estate is in no way a priority in the wake of the immediate loss caused by the death of a loved one. However, when the time comes, the exemption could be applied to benefit the families of those who battled the Coronavirus and paid the ultimate price.”

Do you agree that those who are working on the front line during this pandemic should be exempt from Inheritance Tax when they have lost their life in the line of duty? Let us know on [email protected]

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