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Armed Forces: Inheritance Tax

Volume 459: debated on Monday 30 April 2007

To ask the Secretary of State for Defence (1) whether inheritance tax is payable on the estate of service personnel who are killed (a) on active service and (b) on overseas service outside the theatre of war; (132854)

(2) under what circumstances inheritance tax is waived on the estate of service people killed in the line of duty.

Under S154 of the Inheritance Tax Act 1984, liability to inheritance tax does not apply in relation to the death of service personnel, where the Secretary of State for Defence, or the Defence Council, certifies that the individual died from a wound inflicted, accident occurring, or disease contracted, either on active service against an enemy, or on other service of a warlike nature. This includes current operations in Iraq and Afghanistan.

Should an individual die from an injury or disease contracted at some previous time, with death being due to, or hastened by, the aggravation of the injury or illness which occurred during a period when the aforementioned conditions applied, then consideration is given on a case-by-case basis to granting an exemption from a liability to inheritance tax.

As part of the assistance provided to bereaved families, the MOD Joint Casualty and Compassionate Centre (JCCC) considers whether the circumstances of a death of anyone currently serving in the armed forces allows an exemption from inheritance tax and, where appropriate, provide the executor or family member with a certificate of exemption which can be passed to the relevant tax office.

For claims arising as a result of injuries or illness sustained in previous conflicts or in retirement, applications for an exemption have to be made to the JCCC by the executor/next of kin following the death of the individual concerned.