Group Risk Development (Grid) has written to chancellor Rachel Reeves urgently requesting guidance on how proposed inheritance tax changes will apply to death in service payments, Health & Protection can reveal.
Proposals to include group life schemes registered with HM Revenue and Customs (HMRC) in estate values were part of the inheritance tax (IHT) overhaul in Reeves’s autumn budget and could result in major changes for the sector.
The trade body for the group risk industry has been seeking guidance from HMRC for several months since the government’s post-budget consultation closed in January.
However, since that consultation closed there has been no word and so Grid spokesperson Katharine Moxham told Health & Protection the body had been forced to take the issue higher.
“We are still waiting on HMRC to clarify if it will apply IHT to death in service payouts as part of the pension IHT reforms,” she said.
“We wrote to the chancellor to get that clarification as HMRC has not been forthcoming.
“We are still waiting but it would be big for the sector once we have it confirmed,” Moxham added.
If the guidance is to include registered group life schemes within estates liable for inheritance tax, it could see a significant shift in the market to creating more excepted group life schemes.
HMRC told Health & Protection that an update on the guidance was expected in due course.
HM Treasury did not respond to questions from Health & Protection.
