RNRB and post-death variations

Trusts Discussion
1

Hi All,

Hoping someone can help here…

Clients hold Wills that create an IPDI for their home residence on first death. House worth £900k.
On second death, entire estate, circa £1.2m is to be left in two Discretionary Trusts- one for each child. The reason for the DT’s being that the clients are concerned about their children’s marital relationships.
My question here is as follows:
At the time of the second death, when the estate is left to the children, could a variation/appointment (s142/s144) be made, to leave the inheritance directly to the two children, rather than in the DT’s, and would this help to capitalise on the RNRB?

Any help would be much appreciated.

Thanks in advance.

Henry Straw
April King Legal

2

The short answer is that you can do what you propose in the estate of the second person to die but not as regards the share of the house that passed into trust on the first death. However, that won’t be a great concern in this case since the a half share of the house has sufficient value to use up the RNRB (including the transferred RNRB of the first to die).

Paul Davies
DWF LLP