Inheritance Tax
Rates
Rates of tax remain unchanged at 40% (death transfers) and 20% (lifetime chargeable transfers). In spite of some predictions that IHT relaxations might be announced in anticipation of the election, there were none. As far as we know, the nil rate band of £325,000 will not increase until April 2018 at the earliest.
Public service
There is an exemption from IHT for members of the armed forces whose death is caused or hastened by injury suffered while on active service, even if that death happens later. Where the individual has given their life for the country, the country does not ask for IHT as well. The Autumn Statement extended this to members of the emergency services and to humanitarian aid workers responding to emergency circumstances such as the Ebola crisis. The exemption will be backdated to deaths occurring on or after 19 March 2014.
There is also an IHT exemption for medals and other decorations awarded for valour or gallantry. From 3 December 2014, this will also be extended to cover all decorations and medals awarded to the armed services and emergency services personnel, and to awards made by the Crown for achievements and service in public life.