Apportionment of tax between estate and trust where RNRB available


(Lorna Sansom) #1

Where the deceased had a QIIP at the date of death (just investments in the trust) and has a personal estate which is above the normal Nil Rate Band plus Transferable Nil Rate Band but qualifies for the RNRB, is the RNRB set only against the personal estate or is it deducted from the aggregate total of the personal estate and the QIIP?

Lorna Sansom
Blandy & Blandy LLP


(Paul) #2

The RNRB is just ‘extra’ nil rate band and if it is available it is applied rateably to the whole value of the chargeable estate. The trust will therefore derive some benefit.

Paul Davies
Clarke Willmott


(Cliona O'Tuama) #3

When the RNRB was introduced it was said that it will “reduce the burden of tax for most families by making it easier to pass on the family home to direct descendants without a tax charge”.

In view of this it is in my view illogical, and indeed unfair, that the RNRB is applied rateably to the whole chargeable estate. There is no logical reason why a trust with a large portfolio of investments should get the benefit of part of the RNRB because the deceased life tenant owned a residence.

Cliona O’Tuama

Solicitor