On 21 July the Government published the outcome to their technical consultation following the 2024 Budget announcement to make pensions subject to Inheritance Tax (IHT) from Apr 27 – a policy the Society challenged in January this year, specifically as it related to AFPS Death in Service benefits.
The Government has now accepted the 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.“
FPS Chief Executive Neil Marshall said today:
“I’m 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 spirit of the Armed Forces Covenant whereby those who serve or have served and their families should face no disadvantage compared to other citizens in the provision of public and commercial services.”
