Rare inheritance tax exemption – could you benefit?
There is an Inheritance Tax (IHT) exemption that is so rare that many advisors and families have either forgotten about it or simply don’t know of its existence.
The Inheritance Tax Act 1984’s section 154 covers IHT exemption for both members and former members of the armed forces where death includes active service as a contributory factor. This clause is very specific and states that the death must be certified by the Defence Council or the Secretary of State and decisions are made on an individual basis. Any claim needs to be sent with appropriate documentation to HMRC within two years of the death.
In addition, following the introduction of the transferable nil rate band, spouses of armed forces personnel are able to use the transfer of any unused allowance to the estate of their surviving spouse/partner so that the second estate also doesn’t have to pay any IHT.
Partner and head of the Private Client department at Wilson Browne LLP, Barry Matthews commented: “So many families miss out because they or their advisor are unaware of this exemption and HMRC ends up benefiting. If you are unsure, just ask your advisor or speak to a member of my team.”
Posted by: Wilson Browne LLP
