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Home / News and Insights / Insights / A way of recognising the ultimate sacrifice paid by NHS staff in this ‘moment of national emergency’?

A report by Fergus Walsh on the BBC News at 10 recently, filmed within an intensive care unit in London really shone a light on the work going on there – the long shifts, having to wear the stifling PPE for long periods, the demands for their attention across a busy ward, and the exposure they must have to COVID-19 themselves. Elsewhere I have also heard that some staff are staying in hospital accommodation to be nearer to the wards and to avoid going home and putting their families at risk. The question we asked on our sofa at home was whether, as the spouse or partner of the NHS worker, do you let them come back into the family home for fear of them spreading the virus around the family? As medical staff on those wards are facing a very real threat of death.

Perhaps it’s not the right time to be talking about money and taxes when the death toll is rising so fast and grief is the current emotion around the country, but as a solicitor in the private client field, I cannot help on the frontline in the fight against the coronavirus. However, I can and do help families dealing with the aftermath: the management of estates for those who have died.

Consider the language being used in the press currently. We hear of the ‘fight’ against coronavirus, ‘armies’ of NHS workers on the ‘frontline’ and in Boris Johnson’s letter to households around the country, he referred to this as a ‘moment of national emergency’. As we know that some NHS staff have paid the ‘ultimate sacrifice’.

There is, in legislation, a gesture from a grateful nation for those who die on active service or who later die from an injury or disease contracted whilst on active service – their estates are exempted from inheritance tax. It doesn’t bring the deceased back, but it is a small token to honour their sacrifice.

With effect from March 2014, this was extended beyond those in the armed forces to (1) members of the emergency services and humanitarian aid workers responding to emergency circumstances and (2) constables and service personnel where a person is deliberately targeted by reason of their professional status.

The specific wording for emergency responders is that they die as a result of an injury sustained, accident occurring or disease contracted when responding to emergency circumstances. The definition of emergency responder includes a person employed in providing medical, ambulance or paramedic services.

With Boris Johnson confirming that we are in the midst of a ‘national emergency’, I would be very happy to make the case to HMRC on behalf of the executors of a deceased doctor or nurse’s estate that the exemption should apply on the basis that said doctor or nurse died as a result of contracting COVID-19 in their place of work whilst treating those suffering from it and responding to the ‘national emergency’. I don’t believe the law needs to change because the framework is already there; it might just need the government to confirm that HMRC should be interpreting the legislation to include COVID-19 related deaths.

Would it cost a lot for the government to confirm as such? Probably not. IHT brought in £5.35 billion in the 2018-19 tax year, less than 1% of the government’s total tax take of £620 billion. Only 5% of deaths each year result in IHT being payable, and it is impossible to say how many of those 5% were NHS doctors or nurses and how much their estates were worth.

Even if the gesture were to be in the low tens of millions, it would pale into insignificance against the £330 billion funding package the government has been able to find to help businesses and the economy in general.

People might come back and say that it is just helping out the rich consultants, rather than the nurses who are paid a lot less, but there are two counters to that: first, the same generalism could have been said about those in the armed forces – soldiers might not have enough wealth to be hit by IHT but the higher ranking officers might. It wouldn’t stop me making the gesture in the first place though. Secondly, the IHT threshold is £325,000 and has been since 2010, so people who own their own houses may easily have estates subject to IHT.

It would, in my mind, be very hard to fit care workers within the ambit of the exemption at present, but that is something the government might want to consider as a separate extension of the legislation.

I believe there are benefits payable to family and dependants where a death occurs during service, a benefit many people in the private sector might have through their employments contracts as well, but a lump sum of, say, two years’ salary, is never going to make up for the loss of many years of active service ahead that some doctors or nurses might have, which would have paid for children’s university fees, helped them on the housing ladder etc, so the exemption from IHT on their estate is a way of acknowledging that lost earning power for the family as a whole.

For further information please contact Owen Byrne, Legal Director in our private wealth team, advising on wills, trusts, probate and inheritance tax issues.

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