Lawyers supporting vulnerable and older people say they are in negotiations with the government to close a tax oversight affecting victims of the infected blood scandal.
Practitioners advising the thousands of people infected with HIV and hepatitis C from blood transfusions have identified a gap in provisions for those receiving compensation. HM Revenue & Customs has said these payments are exempt from inheritance tax, but where victims died before receiving compensation, payments to their estates are being taxed during secondary transfers because compensation money is treated as part of the estate. The problem has been exacerbated by delays in securing payments from the £11.8bn allocated by the government.
The Association of Lifetime Lawyers (ALL) and STEP, the professional body for trust and estate practitioners, together with chambers Ten Old Square, are now in talks with HMRC to deal with the secondary transfer issue.
The hope is that draft legislation will be drawn up to enable the necessary legal changes so that relatives of the scandal victims are not penalised through the tax system.
Jade Gani, spokesperson for the ALL and STEP, said families affected by the scandal now face a ‘secondary injustice with an unfair and unexpected tax on their compensation’. She added: ‘We’re currently in talks with HMRC and are grateful for their ongoing engagement, responsiveness and proactive efforts in addressing the inheritance tax implications for families affected by the infected blood scandal.
‘We are encouraged by the progress being made so far, and are hopeful that legislative change will bring about a fair and compassionate resolution.'
The inquiry into the infection of some 30,000 people reopened this week to hear evidence on the workings of the compensation scheme. Des Collins, senior partner with Collins Solicitors and adviser to some 1,500 victims, said the reopening ‘speaks volumes’ about the welter of complaints and concerns on the issue of payments getting through.
‘The compensation process is causing significant distress and anxiety to many of our clients,’ he said. ‘The hope they had last May that finally their suffering would be recognised and that they would receive justice has not come to pass. In fact, for the majority their experience is that little has changed in the obfuscation and delay tactics and disingenuous government behaviour they became used to for so long.’
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