Infected Blood Compensation Scheme: Inheritance Tax
The question
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of exempting infected blood scandal compensation payments from Inheritance Tax when such payments are transferred to the next of kin of deceased victims.
Answered by Dan Tomlinson
Infected Blood compensation payments are relieved from inheritance tax under Schedule 15 of the Finance Act 2020. This is applied to the estate of the recipient of the compensation payment. Where these payments are subsequently inherited, they become part of the beneficiary’s estate and are subject to standard inheritance tax rules, in line with normal practice for compensation schemes.
This ensures victims receive full compensation without tax burdens whilst maintaining fairness in the tax system and protecting the public finances.
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