Could I please ask for views on where we are with IHT on infected blood compensation payments following the recent announcement in the budget. The announcement of additional relief didn’t go into detail and the finance bill allows for further legislation but the draft amendments to legislation by statutory instrument, don’t appear to cover the new announcements on additional IHT relief.
My understanding, as per the policy paper, is that where a person eligible for compensation under the infected blood compensation scheme has already died at the time of payment, the first living recipient of that payment will receive an IHT credit to pass on the value of the compensation following their own death without an IHT charge.
Where the person eligible for the compensation has already died, the first living recipient will also have two years in which to pass on some or all of the compensation payment they receive, without any IHT becoming due. Any qualifying amount gifted will retain an equivalent IHT credit.
However, am I correct in thinking that if the victim is still alive and receives the payment there is no ability for the victim to gift on within two years together with the IHT relief?
Also, if the victim dies after receiving the payment leaving all to spouse/civil partner, am I right in saying that there is nothing that would allow the spouse/civil partner to claim a transferable IHT relief on their death, even though the compensation payment could be passed on within a very short space of time considering potential ages at this point? Hopefully all this will be clarified with further amended legislation but for the time being what are peoples thoughts? Have I missed anything and if not is it known when such legislation will be available?