BEIS0000907 - Statutory Instruments - Inheritance Tax: The Post Office Horizon Shortfall Scheme and Group Litigation Compensation Payments (Inheritance Tax Relief) Regulations 2023

Evidence on official site

‘Status: This is the original version (as it was originally made). This
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STATUTORY INSTRUMENTS

2023 No. 1009
INHERITANCE TAX

The Post Office Horizon Shortfall Scheme and
Group Litigation Order Compensation Payments
(Inheritance Tax Relief) Regulations 2023

Made - eee 14th September 2023
Laid before the House of
Commons - = = = ‘(18th September 2023

9th October 2

123

Coming into force - =

The Treasury make these Regulations in exercise of the powers conferred by paragraphs 2(5) and
(6) and 5(7) of Schedule 15 to the Finance Act 20201).

Citation, commencement and effect

1.—(1) These Regulations may be cited as the Post Office Horizon Shortfall Scheme and Group
Litigation Order Compensation Payments (Inheritance Tax Relief) Regulations 2023 and come into
force on 9th October 2023.

(2) These Regulations have effect from—
(a) 1st May 2020 in relation to Horizon Shortfall Scheme compensation payments, and

(b) 1st August 2022 in relation to Group Litigation Order compensation payments.

Interpretation
2. In these Regulations—

“Group Litigation Order compensation payment” means a payment of compensation made by
the Department for Business, Energy and Industrial Strategy or the Department for Business
and Trade to a person who was a party to a claim against Post Office Limited in respect of the
Horizon system that was subject to a group litigation order;

“Horizon Shortfall Scheme compensation payment” means a payment of compensation made
to a person under the scheme created by Post Office Limited on Ist May 2020 to compensate
people who were adversely affected by accounting shortfalls related to the Horizon system and
includes a top-up payment made under that scheme to account for sums lost to tax;

(1) 2020. 14

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‘Status: This is the original version (as it was originally made). This
item of legislation is currently only available in its original format.

“the Horizon system” means any version of the computer system used by Post Office Limited
known as Horizon, Horizon Legacy, Horizon Online or HNG-X;

“Post Office Limited” means the private company limited by shares with the company number
02154540 whose registered office is 100 Wood Street, London, United Kingdom, EC2V 7ER.

Relief from inheritance tax for Horizon Shortfall Scheme compensation payments and
Group Litigation Order compensation payments

3. The following compensation payments are qualifying payments for the purposes of paragraph
5 of Schedule 15 to the Finance Act 2020—

(a) Horizon Shortfall Scheme compensation payments, and

(b) Group Litigation Order compensation payments.

Andrew Stephenson
Stuart Anderson

Two of the Lords Commissioners of His

14th September 2023 Majesty's Treasury

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Document Generated: 2023-10-09
Status: This is the original version (as it was originally made). This
item of legislation is currently only available in its original format.

EXPLANATORY NOTE
(This note is not part of the Regulations)

These Regulations provide for relief from inheritance tax in relation to Horizon Shortfall Scheme
compensation payments and Group Litigation Order compensation payments.

Horizon Shortfall Scheme compensation payments are made by Post Office Limited to people who
were adversely affected by accounting shortfalls related to the Horizon system. Group Litigation
Order payments are made by the Department for Business, Energy and Industrial Strategy or the
Department for Business and Trade to people who were parties to a claim against Post Office Limited
in respect of the Horizon system that was subject to a group litigation order.

Schedule 15 to the Finance Act2020 (c. 14) provides for exemptions and relief from tax in respect of
qualifying payments. Under paragraph 2(5) of that Schedule, the Treasury may by regulations specify

that compensation payments made by a public authority or by or on behalf of the United Kingdom
government are qualifying payments. Paragraph 5 of the Schedule provides for a relief from
inheritance tax where a qualifying payment is received by a person or the personal representatives of
a person. This relief reduces the tax chargeable on the value transferred by the transfer made on the

person’s death by the lower of the applicable [HT rate on the amount of the payment or the amount

of IHT that would otherwise be chargeable.

These Regulations apply with retrospective effect in accordance with regulation 1(2) under the power
in paragraph 5(7) of Schedule 15 to the Finance Act 2020. These Regulations have effect in relation
to Horizon Shortfall Scheme compensation payments from 1 st May 2020 and Group Litigation Order
compensation payments from Ist August 2022.

A Tax Information and Impact Note covering this instrument will be published on the website at
hittps://www. gov.uk/government/collections/tax-information-and-impact-notes-tiins