Budget 2014: Osborne Makes Inheritance Tax Pledge for Emergency Services Workers

The Chancellor George Osborne has announced that emergency services workers killed in the course of duty will be exempt from inheritance tax.

The levy, which has a threshold of £325,000 in 2013/14, is usually paid on an estate when a person dies and is sometimes payable on trusts or gifts.

The government explained the tax is payable at 40% on the amount over this threshold or 36% if the estate qualifies for a reduced rate as a result of a charitable donation.

The news came during the Chancellor's budget announcement in the House of Commons.

Osborne also claimed that his economic plan is for "doers, makers and savers" as a reduction of the deficit will mean families save £2,000 a year in interest.

The chancellor announced that the UK's net debt will peak at 78.7% in 2015-16, up from the Office for Budget Responsibility's original prediction of 74.4%.

The news comes as Osborne revealed that the Office for Budget Responsibility (OBR) has raised its forecast for 2014 to 2.7%, from 2.4%.

For 2015, the government predicts a rise in economic growth to 2.3%, from 2.2%.

In Osborne's Budget announcement last year, his GDP forecast for 2014 of 2% was later cut in the Autumn Statement to 1.8%.

However, the 1.8% economic growth rate was triple the size of the Office for Budget Responsibility (OBR) prediction and subsequently the unit raised its forecast for 2014 to 2.4%.

Osborne received a boost ahead of his budget announcement as employment in the UK jumped to a new record high in the three months to January.