Families of soldiers who die on operations, or soon after returning, having suffered injury or illness, are exempt from paying Inheritance Tax under section 154 of the Inheritance Tax Act.

The Joint Casualty and Compassionate Centre (JCCC) of the Armed Forces can grant exemptions from the tax, provided certain criteria are met.

Exemptions are granted on the estates of military personnel (Regular and Reserve) who die from a wound inflicted, an accident occurring, a disease contracted on, or a pre-existing condition aggravated by active service against the enemy or on other service of a warlike nature.

Those personnel killed in action in Iraq or Afghanistan will qualify for the exemption. In these cases JCCC will automatically consider the circumstances of death and issue an exemption certificate.

The exemption, however, is not granted for death or injury sustained on, or aggravated by training or routine peacetime activities.

Historical cases

Exemptions can also be granted on the estate of those who die in retirement (or later in their military career), where it can be proved their death was due to or hastened by an injury or illness sustained on or aggravated by past military service that meets the requirements of the Act.

Historical cases will be considered on their own merits and JCCC’s medical advisers will require access to the soldier’s complete medical records (military and civilian).

The 40 per cent Inheritance Tax threshold is set on estates worth more than £325,000 until April 2014. Estates worth less than this amount are exempt from any tax.

For more information about exemption from Inheritance Tax contact the JCCC through the link in the right-hand panel.