Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will make it her policy to ensure Inheritance Tax is not charged on death in service payments paid to relatives of armed forces personnel.

Members of the armed forces deserve our gratitude for their service and a pension that ensures dignity in retirement.

The Government will bring most unused pension funds and death benefits payable from a pension into a person’s estate for inheritance tax purposes from 6 April 2027. Inheritance tax is already applied to death in service benefits for some pension schemes.

Estates of service personnel will benefit from the normal nil-rate bands, reliefs, and exemptions available. For example, the nil-rate bands mean an estate can pass on up to £1 million with no inheritance tax liability and the general rules mean any transfers, including the payment of death benefits, to a spouse or civil partner are exempt fully from inheritance tax. There is also a full exemption from inheritance tax when a member of the armed forces dies from a wound inflicted, accident occurring, or disease contracted on active service.