Does this will clause create a life interest for IHT purposes?


(Ben Leach) #1

A clause I haven’t come across before:

I devise my messuage situate and numbered [ ] and my furniture and effects of household use and ornament therein or belonging thereto to my trustees UPON TRUST that my Trustees shall permit such one or more of my children as shall at my death be unmarried to reside therein rent free so long as he she or they or either of them shall remain unmarried he she or they during that time keeping the said premises and effects in good repair and insured so far as practicable against fire and I declare that from and after the death or marriage of either of my unmarried children for the time being or in case either of them shall not be willing to reside therein my Trustees shall stand possessed of the said premises and effects upon the trusts and with and subject to the powers and provisions hereafter declared and contained of and concerning my residuary real and personal estate.

The only child eligible on the testator’s death in 1975 made the most of this provision by remaining unmarried and living to the age of 99, dying earlier this year. The deceased occupier has a taxable estate, so we will need to establish whether this would be treated as a life interest that would be aggregated to her estate or not. Any thoughts please?

thanks

Ben Leach
Molesworths Bright Clegg


(Paul Saunders) #2

I believe this will have been a life interest and, therefore, aggregable for IHT purposes.

I recall a case report several years ago, when a similar provision needed to be construed for IHT purposes (apologies, I do not also recall the case name). The judge decided that whether or not they lived at the property, the unmarried children of the testator as a class were joint life tenants. If one married (or died), a transfer of value arose and the remaining unmarried children’s individual “shares” were enlarged.

Should the now deceased occupant have any surviving unmarried siblings, the trust may well continue.

Paul Saunders


(Pip) #3

Ben, I would agree that the wording of the Will does appear to create - and certainly seems to have been accepted by the recently deceased to have created - a Life Interest which should therefore aggregate for IHT.

Philip Baldwin
Bray & Bray