As we mark 100 years since the start of world war one, the sacrifice made by members of the armed forces is commemorated on both Remembrance Sunday and Armistice Day.
Parliament also recognises the gallantry of servicemen and women killed in the line of service through the provision of privileged wills and inheritance tax exemptions.
In law, the usual position regarding a will is that it must be in writing, signed by the person making it and witnessed by two people. This was set out in legislation dating back to the 1837 Wills Act, the first year of Queen Victoria’s reign.
By contrast, a privileged will is an informal will made by a person who is about to put their life at risk and does not comply with these formalities. It can be made by anyone in active military service in an operational area or anyone about to be posted to one.
Many world war one soldiers wrote wills in their pocket service book and tucked them into their uniforms. To mark the centenary of the war, the National Archive has released almost a quarter of million such wills in digital format on its website.
Meanwhile, for centuries there have been exemptions and allowances against taxes and duties charged on the estates of soldiers and sailors who have died in the service of their country.
The interpretation of who qualifies for tax exemptions was widened considerably during the second world war.
The current legislation states that in order to qualify, the person must have died either as a member of the armed forces while on active service against an enemy, or sometime after – but the death must have been due to or hastened by the aggravation of injury received or disease contracted during a period when they were a member of the armed forces and whilst on active service against an enemy.
This widening of the exemption beyond deaths on active service means that veterans can save inheritance tax providing that veteran’s cause of death is linked to their original wartime injuries, even if the death occurs many years later. It is sufficient to show that the original injury contributed to the eventual causes of death recorded on the death certificate.
The ‘death on active service’ exemption to inheritance tax is a specialised field and is often overlooked by families and some legal advisors. The estates team at Higgs & Sons has the expertise to deal with these rare cases where it can take quite a lot of research to establish the link between original injuries and cause of death.
Veterans from the world war two are not the only possible claimants; the exemption also applies where members of the armed forces served in more recent conflicts such as Northern Ireland, the Falklands the Gulf wars, and also on deployment in Iraq and Afghanistan.
This provision continues to evolve as the government recently consulted on extending the exemption further to recognise the sacrifice of emergency services personnel who are killed in service or by an injury sustained on duty when responding to a ‘blue light’ situation. New laws are set to give parity with the armed forces by introducing an exemption from inheritance tax to those who serve in the police force, fire service, ambulance and search and rescue services.
For more information about the death in service exemption from inheritance tax, or if you have any questions about making a will, contact Ian Bond at Higgs & Sons on 0845 111 5050.
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