IPDI never constituted

#1

By her will W left her share (half) of the matrimonial property to H on IPDI. W died in 2012, probate was never obtained and her Executors had no clue about the IPDI. H continued to live in the property and has now died. As the trust property aggregates with his estate and on the basis that no IHT is payable and no income was ever earned by the trust, do HMRC need to see IHT100 or can H’s estate just be accounted to them simply on form IHT205 (as the estate is not large) and the argument is that the trust was never constituted.

Claire Carr
Rexton Law LLP

#2

Whilst property may not have been assented to the trustees, the entitlement of H continued in existence until his death and will be subject to IHT on his death.

Having said that, if H had no knowledge of his entitlement, it may be that his executors could disclaim the entitlement under s.93 IHTA 1984. The acceptance of such a disclaimer by HMRC will be dependent upon the facts.

On a separate aspect, as there has been no assent of W’s interest in the property to the trustees, the CGT base value of her “share” will be the value as her date of death value with principal residence relief applying only if a claim for relief under s.225A TCGA 1992 is accepted.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

#3

I believe that an IHT 205 is all that is needed.

Patrick Moroney
BWL Solicitors

#4

The Trust still existed whether or not they did anything about it at the time.

You may also need Grant for W if held as TinC to properly distribute the proceeds once received as they should be separated especially if different beneficiaries for the trust/estate

I would do form IHT400 for the estate of H

IHT100 to end the Trust of W (if over 80% of the NRB).

You need the Trustees of the Trust to do a Trust return to claim s225 TCGA otherwise there is a CGT issue from date of W’s death.

Maria Goodacre
Bells Solicitors Ltd