Soldiers' families could skip inheritance tax

Families of soldiers who died as a result of injuries sustained while in service could be exempt from paying inheritance tax.

To help potential beneficiaries make use of this exemption from inheritance tax, an advisor has urged families to keep soldiers' medical records.

Andrew Goldstone, tax partner at solicitors Mishcon de Reya, told The Guardian that the rule applies to long-term conditions as well as clear-cut cases of injuries.

He said: "Someone who is blown up by a mine is clearly covered by this exemption, but it also covers the long-term effects decades later of some injury or disease someone may have suffered connected with their military service which is then linked to whatever it is that kills them."

As well as benefiting families of soldiers for future claims, the rule can be used for beneficiaries of soldiers who fought as far back as World War II, though many do not know it.

Even professionals overlook the possibility of this loophole, according to Peter Nellist, partner and certified financial planner at Clarke Willmot.