The Forces Pension Society is pleased to announce that, following its submission to to HM Treasury in January this year, the Government has accepted that its planned policy would “create inconsistencies with death in service benefits paid in other ways, particularly payments of lump sums from a non-pension group life policy held in trust”.
The Government’s proposal had been that death in service lump sum payments for service personnel who die in service and who are not married or in a civil partnership should be liable to Inheritance Tax. The Society in its submission, argued that this proposal would have been at odds with existing policy and was certainly not within the spirit of the Armed Forces Covenant.
Maj Gen Neil Marshall, CEO of the Forces Pension Society commented:
“I’m very pleased the Government has used the consultation process constructively and agrees with the concerns we raised. This welcome decision will ensure all Armed Forces Pension Scheme Death in Service benefits will now be out of scope of Inheritance Tax, irrespective of the Service Persons’ marital status.
“This is in line with the Armed Forces Covenant whereby those who served, and their families, should face no disadvantage compared to other citizens in the provision of public and commercial services.”
