The Government has accepted proposals from a retired tax consultant to mitigate the financial penalties that the family of a front line doctor may incur with Inheritance tax if their sacrifice in the service of others results in them contracting Covid-19 and subsequently dying.
The proposal is unlikely to benefit a huge number of people particularly as married couples potential have a combined tax allowance (on the second death) of £1 million pounds. However, a front line doctor married, without children will not have the available Residential Nil Rate band (RNRB) worth up to £350,000 and an unmarried doctor may potentially only have a single allowance of £325,000.00.
Whilst all of the above figures may appear ‘beyond the reach’ of a large section of society, the ‘call to arms’ has seen a number of retired doctors who, not surprisingly are financially comfortable in retirement, returning to a potential ‘war zone’. Whilst they may have planned to mitigate their tax liabilities over the course of their retirement (at leisure pace), they are fulfilling a much needed duty to society. The least that should be offered is a waiver of death taxes should their adherence to the Hippocratic Oath result in their premature death.
It is expected that this welcome change will be enacted through an extension of an often overlooked exemption within the Inheritance Taxes act 1984 that is well known to GAD Solicitors, but a mystery to the general public and for that matter, many other law firms who attempt to ‘dabble’ in Private Client Matters.
There are currently three exemptions from Inheritance tax that apply to the following areas of employment:
- Emergency Service Personnel
- Armed Forces and Civilians subject to Service Discipline
- Constables and Service personnel targeted as a result of their jobs
The exemptions carry technical conditions and qualifications that are best discussed in a separate article. It is likely that the addition of front line doctors will be by way of a ‘new’ addition to this list, though it is possible that the Emergency Service Personnel exemption will be extended to cover the catching of Covid-19 whilst working as opposed to catching a ‘disease’ when attending an ‘emergency circumstance’ (e.g. an earthquake). The text of the new exemption is awaited.
It is hoped that the exemption will be wide enough to cover all staff in the NHS and in the care sector so that should tragedy strike, the family left to pick up the pieces are not penalised with a tax bill because of their loved one’s sacrifice.
Contact our Inheritance Tax Solicitors