IHTM05201 | Compensation schemes: The Infected Blood Compensation Scheme, Infected Blood Estates Interim Payment Scheme and The Horizon Conviction Redress Scheme (England, Wales & Northern Ireland)

Background

The Infected Blood Compensation Scheme (IBCS) has been set up to pay compensation to victims of infected blood in the UK. In August 2024, the IBCS was established in regulations. These regulations gave the Infected Blood Compensation Authority (IBCA) the powers to start making ‘core’ compensation payments to infected people, both living and deceased and to pay compensation for infected people registered with an Infected Blood Support Scheme (IBSS).

The Infected Blood Estates Interim Payment Scheme (IBEIPS) is a UK-wide scheme, administered on behalf of the UK Government by the administrators of the UK Infected Blood Support Schemes (IBSS) (and in Scotland by the Scottish Ministers in conjunction with the administrators of the Scottish Infected Blood Support Scheme). They provide interim payments of £310,000 to the estates of those deceased infected beneficiaries who were registered with an existing UK IBSS or previous support schemes run by the Alliance House Organisations before 17 April 2024 for deaths not yet recognised.

On 12 February 2025, Government laid additional draft regulations which included expanding the eligibility of the IBCS to include people who are affected and introducing the supplementary compensation routes.

The Horizon Conviction Redress Scheme (HCRS) was set up to compensate postmasters whose wrongful convictions were overturned in bulk through legislation due to errors in the Horizon IT system. On 24 May 2024, convictions for postmasters in England, Wales, and Northern Ireland were quashed after the Post Office (Horizon System) Offences Act 2024 received Royal Assent. Scottish Parliament passed a similar bill on 13 June 2024 to quash the wrongful convictions of Scottish postmasters.

Applying for a grant of probate

If the person eligible for compensation has died, anyone who represents their estate will need to provide a grant of probate before the administrators of the Scheme can make a payment. There is a simplified procedure for Personal Representatives (PRs) that are applying for a grant of probate to claim compensation.

This guidance may not cover every situation. The exact steps you need to take will depend on:

• Whether the estate meets the criteria for an excepted estate (IHTM06011) for Inheritance Tax (IHT); and

• When the person died.

If the estate is an excepted estate

Deaths on or after 1 January 2022

If the estate meets the criteria for an excepted estate, PRs can declare this on the probate application. You do not need to fill in a HMRC form.

In Northern Ireland

PRs must give details of the assets they need a Grant of Representation for, and extra information for Inheritance Tax. Use the Estate Summary Form NIPF7

Deaths between 1 January 1982 and 31 December 2021

If the estate meets the excepted estate criteria, PRs should complete the most recent IHT205 form, (IHT205 (2011 version)).

In normal circumstances, if the value of an estate is nil at box D of the IHT205, the applicant would be asked to complete a full IHT estate account on form IHT400. However, if the estate qualifies as excepted, PRs are not required to complete the form IHT400. Instead, in box 13 of the IHT205 form, write one of the following:

IBCS: “The Infected Blood Compensation Scheme”

IBEIPS: “Compensation payment due Infected Blood Estates Interim Payment”,

HCRS: “Compensation payment due the Horizon Conviction Redress Scheme”

PRs should send the IHT205 (2011) form and supporting documents directly to:

• HMCTS (England and Wales)

• NICTS (Northern Ireland)

Deaths before 31 December 1981 (for IBEIPS and the IBCS only)

PRs need to complete and sign a declaration (IHTM05202) and send the declaration together with the probate application, directly to HMCTS (for England and Wales) or to NICTS (for Northern Ireland).

If the estate is not an excepted estate

If an estate does not meet the criteria for an ‘excepted estate’, regardless of when the death occurred, PRs should submit a full IHT400 account. Any IHT due should be paid on the residual value of the estate after the value of the IBEIPS, IBCS or HCRS payment has been deducted.

England & Wales

After HMRC processes the IHT400, it will issue a unique code. PRs must use this code to apply for probate on the HMCTS digital portal.

Northern Ireland

PRs should complete from IHT421 and form IHT400 to HMRC. If all is in order, HMRC fill in their part of Schedule IHT421 and send it back to the PRs. PRs can then apply for probate.

If probate has already been granted

Where claimants already hold a grant of probate or letters of administration, this is usually enough for the Scheme to make payment to the person legally entitled to receive it.

The estate no longer qualifies as an excepted estate after compensation - claiming Inheritance Tax relief

In some cases, receiving a compensation payment may mean the estate no longer qualifies as an excepted estate.The inheritance tax (IHT) process will then depend on when the person died and whether they had the right to claim the compensation at that time.

If the person died before the compensation schemes were announced

The right to claim did not exist at the time. Therefore, no compensation payment needs to be included in the estate. In this case, if the estate would otherwise qualify as excepted, PRs do not need to complete the form IHT400 account to report the compensation.

If the person died after the scheme was announced

The right to claim compensation is part of their estate. PRs should declare this on the form IHT400 to claim IHT relief.

HMRC will provide a credit against any IHT due on death. For example, if someone received £100,000 in compensation, their estate would receive a £40,000 IHT credit. This credit can reduce the estate’s lHT liability to zero but will not result in a tax refund.

Guidance on completing the IHT400 form is available here.