Commons Sense

House of Commons · Written Ministerial Statement

Inheritance tax relief for infected blood compensation payments

18 December 2025 · Treasury

Proposed by Dan Tomlinson Lab Chipping Barnet

Taxation

Summarised by AI from the official record, so it can contain mistakes.

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At a glance

Key points

  • Government extending relief from inheritance tax for compensation payments under the Infected Blood Compensation Scheme and Interim Compensation Payment Scheme
  • Finance Bill 2025-26 includes power to amend IHT treatment of infected blood compensation schemes through secondary legislation
  • Individuals impacted should take necessary actions ahead of the changes taking effect

Issue summary

The government is extending relief from inheritance tax (IHT) for compensation payments made under the Infected Blood Compensation Scheme and Interim Compensation Payment Scheme to benefit first living recipients and infected or affected individuals.

Action requested

Finance Bill 2025-26 includes a power to change IHT treatment of infected blood compensation schemes via secondary legislation. The government will lay regulations for parliamentary approval, and individuals impacted should take necessary actions ahead of the changes taking effect.

Key facts

  • Compensation payments are already relieved from IHT on death for eligible recipients.
  • First living recipients can now pass on the value of compensation payments without attracting an IHT charge retrospectively.
  • Qualifying gifts made by first living recipients must be recorded in writing and signed, with a deadline of 2 years after payment date.
  • Lifetime transfers of compensation payments by infected or affected individuals will not attract IHT charges.
  • HMRC will refund overpaid IHT on infected blood compensation payments using form C4 available from the government website.
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