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HMRC internal manual

Inheritance Tax Manual

Compensation for wrongs suffered during World War II: payments to slave or forced labourers or other victims of the German Nationalist Socialist (Nazi) regime

There are a number of schemes under which compensation is paid to claimants who suffered at the hands of the Nazi regime during the Second World War era. Normally the payment, or the value of the right to make the claim, would form part of the deceased’s chargeable estate. 

Under IHTA84/S153ZA (replacing Extra Statutory Concession (ESC) F20) where the payment has been made, or the personal representatives include a value for the right to make a claim, the payment/value for the right is effectively left out account for Inheritance Tax purposes. S153ZA replaced the ESC for deaths on or after 1 January 2015.

S153ZA (and, before it, the ESC) applies whether or not the money can actually be traced in the deceased’s assets and irrespective of when the money is received. If the payment is made, the estate is entitled to the deduction.

Payments directed towards compensation for personal hurt (as opposed to compensation for property that was stolen or destroyed) from the following sources are covered:

Germany

  • a payment of a fixed amount from the German foundation known as ‘Remembrance, Responsibility and Future’ (’Stiftung Erinnerung, Verantwortung und Zukunft‘) in respect of a person who was a slave labourer or forced labourer,
  • a payment of a fixed amount in accordance with the arrangements made under The Swiss Bank Settlement (Holocaust Victim Assets Litigation) in respect of the slave labourers or forced labourers qualifying for compensation under the Remembrance, Responsibility and Future scheme,
  • a payment of a fixed amount from Der Hardship Fund established by the Government of the Federal Republic of Germany,
  • a payment of a fixed amount from the Child Survivor Fund established by the Government of the Federal Republic of Germany;

Austria

  • a payment of a fixed amount from the National Fund of the Republic of Austria for Victims of National Socialism (Nationalfonds der Republik Österreich für Opfer des Nationalsozialismus) under the terms of the scheme as at June 1995,
  • a payment of a fixed amount in respect of a slave labourer or forced labourer from the Austrian Reconciliation Fund (Österreichischer Versöhnungsfonds);

Switzerland

  • a payment of a fixed amount by the Swiss Refugee Programme in accordance with the arrangements made under the Swiss Bank Settlement (Holocaust Victim Assets Litigation) in respect of refugees;

The Netherlands

  • a payment of a fixed amount under the foundation established in the Netherlands and known as the Dutch Maror Fund (Stichting Maror-Gelden Overheid);

France

  • a one-off payment of a fixed amount from the scheme established by the French Republic and known as the French Orphan Scheme (Indemnisation des orphelins, décret 2000-657).

The instruction at IHTM04423 tells you how to apply the relief.