Inheritance tax and death from service

I suppose i) most people won't have enough in the way of assests for this to matter, and ii) those who do know about this, but there was an interesting little piece on how to avoid inheritance tax if your death is linked to military service, even if 40 years have elapsed. The revenue (apparently) are pretty liberal in interpreting the rules, you (or more accurately, your heirs) have to show a plausible link.

It's near the end of this weeks prog on Moneybox on Radio 4. Should be repeated tonight (Sunday 15/11) at 2100, although the actual piece is near the end of the prog.

Apparently a spouse can inherit the exemption.
Has been previously discussed here.


Under s154 of the Inheritance Tax Act the MoD can certify a serviceman or womans estate exempt from IHT if their death can be linked to active service against the enemy - even if death occurs many years later.

Assets passing direct to a spouse are already automatically exempt from IHT under a general tax provision, therefore the value of s154 to the executors of the spouse's estate is that if their husband / wife's estate is granted an exemption under S154, when the spouse eventually dies the unused personal tax threshold (currently £325K) can be taken into account before IHT falls due on their estate (325K x 2 = £650K). Other than the above exemptions, there is no automatic exemption from IHT on the estate of a spose of a ex-serviceman or woman

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