Tax advice of the week: Avoid unnecessary death duties

published 25 June 2010

Each year some families pay hundreds of thousands of pounds unnecessarily in death duties, says Jo Thornhill in the Mail on Sunday. The little-known 'death-on-active-service provision' exempts anyone who dies prematurely as a result of injuries or diseases sustained on military service from all inheritance tax, says InheritanceIssues.co.uk.

This could even apply to people who die as a result of wounds suffered decades ago, as it covers death linked to the initial injury. The heirs of the 4th Duke of Westminster demonstrated that his death from cancer in 1967 had been hastened by septicaemia in a war wound.

The exemption applies also to doctors, nurses, drivers and war correspondents. Solicitor Peter Nellist of financial planner Clarke Willmott, who has worked on many cases, says "as military action continues in Afghanistan, the issue has never been more relevant this could apply to thousands more service personnel in future".