RNRB and a "nil rate band trust"

A couple have wills dating back to 2002 - they contain a “nil rate band trust” with no right to reside. They own their main residence as tenants in common.

Could the RNRB still be claimed on second death with this type of trust? I ask because it is not one of the categories of will trusts listed on gov.uk here as being eligible for RNRB:
https://www.gov.uk/guidance/trusts-and-inheritance-tax#dealing-with-a-trust-when-someone-dies

And could the RNRB still be claimed, even if there’s a nil rate band trust, using a deed of variation? And when would this need to be done - after first death or second death?

Many thanks,

Graham Southorn
Adonis Blue

The share of the first to die will not qualify for the rnrb on the first death, as it does not go to a lineal descendant on that death, but it can be claimed as a trnrb on the second death, if the house is of sufficient value.

However the rnrb cannot be claimed in respect of the share of the first to die if the share goes into the nrb trust, either on the first or second death.

Simon Northcott

1 Like

Usually the nil rate band trust would be wound up within 2 years - if capital (inc the house) is appointed to children then RNRB could be claimed on the first death. Otherwise, a full transferable RNRB will be available on the second death if the survivor’s interest in the house is valuable enough. It may help if the trust capital is appointed to the survivor (either absolutely or on a life interest) so the survivor has the whole value of the house in their estate for the RNRB claim.

Tobias Gleed-Owen
Hewitsons LLP