Newspaper Looks Into Little-Known Aspect Of Law

The issue of inheritance tax being levied on medals awarded for military services has been thrown into the spotlight once again in recent weeks.

An article in the Daily Telegraph has outlined how the son of World War II veteran was stunned to learn that medals awarded for general service during a conflict would not be exempt from inheritance tax.

However, it went on to highlight that medals given to individuals for gallantry during service are exempt from such consideration, unless the item has at any point been sold. In cases where the latter applies, any exemption is lost.

Medals which are awarded for gallantry in the UK and are excluded from inheritance tax include the Victoria Cross, the George Cross and the Military Cross.

Some awarded overseas are also exempted, including the Legion d’Honneur and the Croix de Guerre.

Expert Opinion

This is a quirk of law and a loophole that not many relatives of former military personnel may realise is in place. However, it is clearly important that this is carefully considered for a number of reasons. <br/> <br/>"While there is of course a financial aspect to this, the sentimental value of personal effects in a person’s estate should never be underestimated. We have seen numerous cases when disputes have emerged between loved ones regarding chattels and have seen the emotional heartache which can be caused when a conflict emerges. <br/> <br/>"It may not just be a case of disputes emerging regarding items, but also of issues arising in relation to how an executor has agreed that an estate should be divided – potentially with items not being handled in the necessary manner. <br/> <br/>"Ultimately, issues which arise in relation to items such as jewellery, medals and ornaments should not be underestimated and demonstrate that estate administration is about more than the financial value of the items involved." Paula Myers - Partner