Frontline care workers exempt from inheritance tax


The families of frontline care workers are to be exempt from inheritance tax should they die as a result of COVID-19, the government has said.

The legislation, known as the ‘blue light exemption’, was originally created for emergency services and serving military personnel, but has now been extended to include care workers, in recognition of their work on the frontline during the pandemic.

Mandy Casavant, a Senior Associate in the Private Client practice at law firm Royds Withy King, said: “HMRC, recognising the sacrifice many care workers have and will make, has indicated that it will extend this exemption to employees of publicly funded care homes, home care workers, and to those employed by charities providing a service to combat Covid-19.

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Inheritance tax is charged at 40% on estates valued at over £325,000 or £650,000 for a married couple. There is an additional banding given where the deceased passes on their residence to descendants of £175,000 or £350,000 for a married couple. Certain conditions and rules apply to these figures, so advice ought to be sought in each case. 

“This front liner relief will, importantly, extend not just to those carers who lose their life now but to those who lose their life at any point in the future if a clear link to the coronavirus can be proven,” said Casavant.

“Whilst it is recognised that many carers are amongst the lowest paid in the sector with estates that would likely fall outside of inheritance thresholds, it is a welcome move by HMRC.

“It has yet to be tested how far this ‘blue light exemption’ will go. We would urge HMRC to extend the same exemptions to other key workers who may contract Covid-19 and lose their life as a result of the service they have provided.”

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Sarah Clarke

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