Arbitrary inheritance tax rule scrapped

An arbitrary rule which meant that inheritance tax applied to some war medals but not all, has been scrapped.

The anomaly in the existing tax rules meant that only medals awarded for "valour or gallant conduct" could be passed down through the family exempt from the tax. Medals in this category include the Victoria Cross and the Military Cross.

However, scores of other medals including those granted to servicemen who died in both World Wars were not exempt from death duties. This seemingly senseless decision led to some families feeling as if the sacrifices of their relatives were seen as somehow less significant.

While HMRC acknowledged this potentially upsetting implication, a spokesman said "this is in no way meant to take away from the intrinsic value of awards recognising the service of all veterans."

In his Autumn Statement Chancellor George Osborne included a clause which will end this distinction, and all war medals will be exempt from inheritance tax.

The notes accompanying the statement said "From December 3 2014, it [the exemption] will apply to all decorations and medals awarded to the Armed Services or emergency services personnel, and to awards made by the Crown for achievements and service in public life."

If you need expert advice regarding inheritance tax, our specialist solicitors can help. You can speak to our team on 0161 928 5558, or email us at fottavianelli@collings-solicitors.co.uk and we will get back to you at the first opportunity.

Collings

Altrincham Inheritance Tax Solicitors