Simplified IHT exemptions required for emergency workers, firm says

Simplified exemptions to inheritance tax (IHT) are urgently required for Covid-19 health workers on the front line, according to MHA MacIntyre Hudson.
The accountancy firm argued that current IHT rules provide an exemption from IHT in defined circumstances for emergency workers, but that “the extent to which relief might apply” is unclear, in respect of deaths arising from Covid-19.

MHA MacIntyre Hudson suggested the legislation, which the firm called “well intentioned”, is not cut out for the current circumstances of the pandemic.
“The onus is currently on the personal representative of the deceased to provide evidence to show that the deceased’s death was as a result of, or hastened by, them responding to emergency circumstances in their role as an emergency responder,” MHA MacIntyre Hudson tax partner, Nigel May, commented.

“There are obvious problems with meeting these requirements in the current environment, particularly for medical staff who succumb to Covid-19. While the controversy regarding personal protective equipment rages, it seems potentially difficult to establish the proof between contracting the virus and response to an emergency situation, particularly for medical staff not directly involved with Covid-19 cases.

"For example, HMRC guidance makes it clear that normal journeys to and from work are not viewed as responding to an emergency, yet in the current state of lockdown, it would seem clear that this is anything but the case – health workers are compelled to travel to perform their duties. A worker not actually dealing with Covid-19 cases, but performing vital work during this crisis, will be at heightened risk purely down to their presence in a hospital.”
Healthcare partner at MHA MacIntyre Hudson, Andrew Leal, added: “Much has been made of the low pay that many health workers receive. As a result, it may well be there will be very few cases where consideration of this relief is required.

“However, there is a good case that all front-line health workers engaged in the battle against Covid-19 should be expressly exempted from IHT under S153A or an equivalent. GPs and consultants are more likely to be impacted by the IHT limits, but there are other important considerations, for example, a clinician coming out of retirement to support the health service would of course be at greater risk should they contract Covid-19.

“It would be particularly regrettable if the personal representatives of any deceased front line worker had to face an evidential battle with HMRC to avoid unfair taxes.”

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