Certain compensation payments made to victims of World War II qualify for exemption from Inheritance Tax, which could have a substantial impact on the IHT bills of those whose lives were disrupted in specific ways by the conflict.
More than 70 years since the war came to an end, the number of survivors who are still alive is likely to be relatively few, but the number of compensation schemes that apply for the exemption is still growing.
The latest addition to the list is a childhood compensation scheme, covering those who were still very young when the war broke out – increasing the likelihood that they are still alive today
The Child Survivor Fund is a German scheme that only launched in 2015, and offers a one-time payment of €2,500 to Holocaust survivors; it is one of ten such schemes that now do not attract an IHT expense, and as such any payments received under these initiatives should be clearly specified as part of the estate.
David Gauke, financial secretary to the Treasury, said: “Many people faced appalling persecution during WWII. I’m glad we’ve been able extend the inheritance tax exemption even further to include a one-off compensation payment for victims who endured this unimaginable trauma in their childhood.”
Under the pre-existing IHT concession, a further nine compensation schemes do not require IHT to be paid when they are included as part of the deceased’s estate:
All of these schemes were already covered by the exemption and, under the draft Finance Bill 2016, this will be enshrined in law along with the addition of the Child Survivor Fund.