Inheritance Tax in a Covid-19 world.
The Covid-19 Pandemic has changed all of our lives in so many ways. Many...Back to News and Events
The Covid-19 Pandemic has changed all of our lives in so many ways. Many people haven’t left their homes for literally months at a time. The rest of us have only recently begun to extend our outings beyond our weekly supermarket trip. It’s changed how we work, how we socialise and how we conduct business.
Whilst lock down is slowly easing, here are some things to note about how the Pandemic has impacted on the Inheritance Tax rules.
NHS workers and other key personnel that die from Covid-19, will have their estate exempt from Inheritance Tax.
Perhaps a reflection on how serious the pandemic is, this is usually only an exemption available for soldiers on active service, and to all emergency personnel who die during a response to an emergency. The exemption is not automatic, and will need to be claimed by the person’s representatives. If you have lost a loved one to Covid-19, and think this exemption may apply, please contact one of our specialists to discuss further.
This is purely speculation, but it isn’t too wild to predict that, to recoup the costs of the Pandemic, there may be some tax increases. The public cost of the pandemic has been huge. It includes all the workers placed on furlough leave, the claims made by the self-employed, the cost on the NHS’s resources, PPE cost, etc.
Even before the pandemic, there had been suggestions that the current Inheritance Tax regime might be reformed. The current system is very complex and often considered unfair. The fact that the system favours those who are married over those who are not, and those who have children to those who don’t, has been quite controversial.
Given the high probability of reform, and the likelihood of tax increases, it seems reasonable to predict that this might be an area the revenue focuses on.
Given the likelihood of the tax rates going up, rather than down, and the current low market values, now is the time to consult your accountant or financial adviser about what action to take. We can also be involved in this process as part of a holistic estate planning approach – we are able to assist in drafting any appropriate changes to your Will, or the creation of any Trust documents that might be required. Indeed, we liaise closely with accountants and financial advisers to ensure that our clients’ financial futures are in the best possible hands.
If you would like to discuss your estate planning needs, please complete our online enquiry form or contact our New Enquiries Team on 0800 389 7093 who will put you in touch with an expert solicitor who can work with you and your advisers as part of a holistic, full service approach.