Really nice that you’re such a thoughtful employer, however I know people who wanted to still work with that diagnosis. It would be wrong to make decisions without him. Why not set up a meeting and go through his options and let him decide.

You sound like a wonderful employer, on paper it sounds perfect but I'm wondering if it could bite you in the bum if HMRC found out ( however, how they would find out I don't know) 

Thats the only fly in the ointment I can see....what would the legal obligations be? Could you be in trouble if HMRC if it all came out? 

I wonder if a chat to a solicitor or cab would help in the decision. Whatever you decide I hope your employee and his family don't have to struggle financially....good luck .

You sound to be a very kind and considerate employer. Can I suggest you read this link from Macmillan. It gives employers some general information but it may be worth ringing the helpline number it gives and asking them for their advice. www.macmillan.org.uk/.../bereavement.html