Delays Deepen Injustice and Create Inheritance Tax Risks for Families

Leading law firm Irwin Mitchell has responded to the newly published report by Sir Brian Langstaff, chair of the Infected Blood Inquiry, warning that continued delays in the government’s compensation scheme are not only prolonging victims’ suffering but also exposing families to unexpected inheritance tax (IHT) liabilities.

Sir Brian’s report, released today, found that thousands of victims of the infected blood scandal have been “harmed further” by the way the compensation process has been handled. Despite the government allocating £11.8 billion for compensation, only 460 victims have received payments to date, with many still waiting to be invited to apply.

Expert Opinion

“The findings of today’s report confirm what we’ve been hearing from clients for months: the system is slow, opaque, and deeply distressing. But what’s less understood is how these delays are creating financial risks for families, particularly around inheritance tax.” Kate Maybury, tax and estate planning specialist at Irwin Mitchell 

While the government has stated that compensation payments are exempt from IHT, Irwin Mitchell warns that this exemption does not extend to beneficiaries unless proper planning is in place.

Expert Opinion

“Married couples often want their surviving spouse to receive their estates when they die. If a victim receives a payout but passes away before making arrangements, their family could face a significant tax bill. For example, a £2.5 million compensation payment could result in a £1 million IHT liability upon the surviving spouse’s death without the right protections.” Kate Maybury, tax and estate planning specialist at Irwin Mitchell