Remarriage and TNRB

Trusts Discussion
1

If A and B are married, and A subsequently dies, leaving their estate in full to B (and A passes an unused NRB);

And B then marries C, and B leaves by Will their entire estate (which includes B’s unused own full NRB) to C;

And then B dies;

Can C (as i.e. executor and sole beneficiary) by a Deed of Variation redirect an amount up to the NRB to a discretionary trust - and thereby ‘save’ the additional (A’s) NRB? So that on C’s death, he/she will still have two NRBs (i.e. B’s and C’s)?

Owen Mason
Vermeylen Law

2

Yes, it is possible to achieve that result under s. 142 IHTA 1984.

Paul Saunders

3

Yes. The extra rnrb could be used by deed of variation too.

If C may remarry best to use two nrbs on Bs death.

Simon Northcott

4

Dear Simon and Paul,

Thank you very much for your responses and time,

It is much appreciated – thank you,

Owen Mason
Vermeylen Law

5

Use of IHTA 1984 s142. would allow the redirection to which you refer.

Once there has been a TNRB this merges with the NRB to form a new NRB. On the execution by C of a redirection (under s142) of, say, £325k of C’s inheritance from B on DT then B’s unused double NRB (ie including the TNRB from A) would reduce to a single £325k NRB available for C’s PRs to claim.

The only difference between a NRB and TNRB is that the latter cannot be used against any lifetime CLT in calculating the IHT thereon.

Malcolm Finney

6

Dear Malcolm

Thank you very much for your response – it is much appreciated,

Owen Mason
Vermeylen Law