Tax free pension if you've got a gallantry medal?

[AHQHI656SQN]

Today at work I was informed by a colleague that recipients of tier three and above gallantry awards (DFC, MC Etc) receive their pension free of taxation, can anybody cast any light on whether it is true?
Tom

[minigundiplomat]

I heard something similar from a similarly decorated amigo. Seem to recall there was some issue, either way I believe he has now factored tax back into his retirement plans.

[Pontius Navigator]

Annuities and additional pensions paid to holders of certain awards
The following are not treated as income for any income tax purposes

•annuities and additional pensions paid to holders of the Victoria Cross
•annuities and additional pensions paid to holders of the George Cross
•annuities paid to holders of the Albert medal or Edward medal
•additional pensions paid to holders of the following awards
•Military Cross
•Distinguished Flying Cross
•Distinguished Conduct Medal
•Conspicuous Gallantry Medal
•Distinguished Service Medal
•Military Medal
•Distinguished Flying Medal.

Purchased life annuities: special types of annuity (http://www.hmrc.gov.uk/manuals/iptm/iptm4600.htm)

[ASRAAM]

The devil I suspect is in the detail. Medals like the VC attract an annuity. According to the ever reliable wikipedia, for UK holders its currently £1495 a year.

In the past some awards have also carried either a pension or a gratuity. Its only the extra bit from the medal thats tax free, not the rest of the pension.

OOps, PN and I crossed. He's much more eloquent!

[AHQHI656SQN]

Income Tax (Earnings and Pensions) Act 2003 (c. 1) - Statute Law Database (http://www.statutelaw.gov.uk/content.aspx?LegType=All+Primary&PageNumber=7&NavFrom=2&parentActiveTextDocId=830981&ActiveTextDocId=831894&filesize=1810)
I guess our friends at the tax office will know.

Tom

[the funky munky]

Any reason the George Medal or the DSO are not on the list? Seems a fairly arbitary selection or is it that these awards attract additional payment?

[Tankertrashnav]

Pretty sure it's only the VC and GC which have a tax free annuity. Never heard of an annuity for any of the lower level awards as listed above. I notice that the website refers to "additional pensions" paid to holders of the MC etc. Anyone know anyone who is getting such an additional pension? Know a few holders of the DFC and as far as I know they dont get anything extra.

It was John Major who decided that the VC/GC gratuity of £100 a year was an insult (it had only gone up once from £50 since its inception) and raised it to something like the present figure.

Back when it was £100 I met a guy with the George Cross and he said he used the money to pay for a weekend in London for the p**s up for the holders of the VC/GC which took place every 2 years. Shows you how far £200 went then!

[heights good]

It is written into QRs, DFCs do attract an extra "pension" which I believe is paid from the date of being presented with the award.

HG

[wokawoka]

If you get an MC or DFC you are entitled to an extra £1200 per year tax free on top of your pension...........if you are not an officer. It is in black and white in the QRs. Who says there is no discrimination in the forces?

[Al R]

War Disablement pensions are tax free, the max at the moment is £154.70 a week.

It also gets you a snazzy little card which gives you free Tube travel.

[minigundiplomat]

DFC you are entitled to an extra £1200 per year tax free on top of your pension...........if you are not an officer.


Ha, that explains a lot.

[Tankertrashnav]

That explains why my DFC chums dont get it -they both won theirs as officers in Bomber Command during WW2 - no doubt the govt didnt like the idea of forking out to the large number of DFC winners (and MC etc) from that period, just the much smaller numbers of OR's from post 1994, well deserved as their awards are.

[Pete268]

War Disablement pensions are tax free, the max at the moment is £154.70 a week.

It also gets you a snazzy little card which gives you free Tube travel.


If one is receiving £154.70 per week, which is the 100% disabled rate, it almost certainly will mean that various other War Pension Supplementary Allowances (all tax free) will be payable. Allowances such as War Pensioners Constant Attendance Allowance, War Pensioners Mobility Supplement, Comforts Allowance, even down to things such as a Clothing and an age allowance (Other Supplementary Allowances to War Disablement Pensions are also available depending on percentage disability and circumstances).

If one does receive a War Disablement Pension and wants to see the supplements available and relevant qualification criteria then Factsheets 6 to 10 of the following link is a good guide:

SPVA Factsheets (http://www.veterans-uk.info/publications/fact_sheets.html)

Although not mentioned on the fact sheets there are also other tax free allowances such as a Home Adaptation Grant, or Convalescence Grant - details here:

Supplementary Allowances (http://www.veterans-uk.info/pensions/supp_all.html)

Not forgetting of course free prescriptions for any medication relating to your accepted condition.

Peter
(North East Veterans Advisory & Pensions Committee)

[Al R]

All good stuff.

I'm not advocating child support avoidance, but another potentially useful concession is that there is a payment flat rate of £5 a week (for any number of children) whose non-resident parent has a net income of £100 a week or less from, but not limited to, a war disability pension.

[tarlshouse]

How about if you are an officer with an AFC rather than a DFC?
I’m guessing you don’t qualify but though I’d ask you learned gentlemen and ladies?

[cats_five]

Annuities and additional pensions paid <snip>

Purchased life annuities: special types of annuity (http://www.hmrc.gov.uk/manuals/iptm/iptm4600.htm)

Also:

"Payments by the German Government to victims of Nazi persecution. These annuities are not regarded as income for any income tax purposes."

[Wensleydale]

..as for other medals mentioned in various posts above. The DSO is (technically) not a gallantry medal but an award for leadership. The George Medals are not for military in actual combat, and the AFC is definitely not awarded for active service gallantry.

[TBM-Legend]

Then you have those cloth heads with the Distinguished Stealing Cross who get free housing and thousands....

Shame on Govts the way they see servicemen and women [and the new trans mob I guess]

[wokawoka]

..as for other medals mentioned in various posts above. The DSO is (technically) not a gallantry medal but an award for leadership. The George Medals are not for military in actual combat, and the AFC is definitely not awarded for active service gallantry.

You are going to upset a fair amount of people who displayed extreme gallantry, not in the face of the enemy.

[Wensleydale]

Possibly so - its just how medals are defined.

[Mogwi]

Annuities and additional pensions paid to holders of certain awards
The following are not treated as income for any income tax purposes

•annuities and additional pensions paid to holders of the Victoria Cross
•annuities and additional pensions paid to holders of the George Cross
•annuities paid to holders of the Albert medal or Edward medal
•additional pensions paid to holders of the following awards
•Military Cross
•Distinguished Flying Cross
•Distinguished Conduct Medal
•Conspicuous Gallantry Medal
•Distinguished Service Medal
•Military Medal
•Distinguished Flying Medal.

Purchased life annuities: special types of annuity (http://www.hmrc.gov.uk/manuals/iptm/iptm4600.htm)

No mention of Distinguished Service Cross?

The DSC, which may be granted posthumously, is "...awarded in recognition of an act or acts of exemplary gallantry during active operations against the enemy at sea."[1]

Personal interest!

[Tankertrashnav]

The DSC, which may be granted posthumously,

Interesting point about posthumous awards. Up to 1979, the only gallantry awards which could be made posthumously were the Victoria Cross and a Mention in Dispatches. In that year the system was changed to allow posthumous awards of all gallantry medals.

I often see erroneous references to "posthumous DFCs" etc during WW2 etc, but this could not happen. Confusion may be caused by the fact that an individual may have been recommended for an award, but subsequently died before the medal itself was conferred, but that is not a posthumous award in the correct sense. The DSO used to be given as a gallantry medal, but as it is an order, rather than a decoration, it cannot be awarded posthumously, and neither can knighthoods or any other order of chivalry.

[Heathrow Harry]

Which really shows what a strange world some people live in...........

I guess the distinction really matters to them

Personally if someone is going to be recognised for bravey , dead or alive, the "grade" surely is totally irrelevant???

[Wensleydale]

Personally if someone is going to be recognised for bravey , dead or alive, the "grade" surely is totally irrelevant???

Gallantry awards can be made "Immediate" which is for gallantry in one action or "Accumulative" which is awarded for conduct over a period of time. Many "accumulative" awards of DFCs for example were often awarded at the end of a Bomber Command tour during WW2. However, it was considered that the sentiment of losing a colleague could lead to an accumulative award for being a nice chap and therefore they were made posthumous to avoid this.

[Tankertrashnav]

Many "accumulative" awards of DFCs for example were often awarded at the end of a Bomber Command tour during WW2. However, it was considered that the sentiment of losing a colleague could lead to an accumulative award for being a nice chap and therefore they were made posthumous to avoid this.

I'm slightly confused by what you are saying Wensleydale. I get that a lot of DFCs (and DFMs) during WW2 were "end of tour" awards. Are you saying that people were being written up for these awards after they were killed? If so, that certainly goes against what I understood to be the regulations at the time. Correct me if I have misunderstood your post

[Wensleydale]

My understanding is that the MC was made posthumous to prevent "sentimental awards" following the death of an officer (the award was instigated in 1915 when there were lots of casualties) - it was felt at the time that if awarded posthumously then such awards would be over applied for and dilute the reason for the medal which was strictly for gallantry and going above and beyond. The other service awards (DSC, DFC etc) were treated the same way.

[Tankertrashnav]

There is an interesting discussion on this matter on the Great War Forum, here

Posthumous awards - Other Great War Chat - Great War Forum (http://1914-1918.invisionzone.com/forums/topic/238591-posthumous-awards/)

I think it can be summed up by saying that the regulations clearly stated that only the VC or an MID could be given posthumously, but that in many cases the rules were "bent".

[topgas]

Until 2000, the value of medals for gallantry was liable to be included in estates for inheritance tax purposes, and only in 2014 was the value of other awards made exempt from IHT.
There is also an exemption from Inheritance Tax for the estates of those that die as a result of active service, even if the death occurs many years later, so long as the death is related to an occurrence on active service. So, if the Duke of Westminster had been mobilised for Herrick and succumbed, his massive estate would have been passed on free of IHT. As a tax planning strategy though, it is a bit extreme!
More recently, this has been extended to the emergency services.

[Heathrow Harry]

I was present when Michael Fitz-Allan Howard (Major General LGCVO, CB, CBE, MC Marshal of the Diplomatic Corps Gold Stick-in-Waiting and Colonel of the Life Guards for 20 years ) tore a strip off the late Duke for "over-representing" his service record...

Amusing ........ you find proto-Walts in every walk of life