A dies leaving a life interest in residue to his wife B, but subject to a NRB discretionary trust of a cash sum equal to the NRB.
B dies 4 months later. One year on, part of the half share of the residence of A and B (held as tenants in common equally) is appropriated to the NRB trust to satisfy the legacy of cash.
Within 2 years of A’s death the NRB trustees appoint part of the NRB trust fund (comprising only a share of the house) to A’s son.
Does s144 apply to the appointment? What is appointed is a share of the house, not a share of a cash sum, and the share of the house is not “property comprised in A’s estate immediately before his death settled by his Will”, but it would seem logically that s144 should apply.
If s144 does apply, does this mean the joint owners discount applies to the share of the house owned by B on her death, and to A’s share of the house in the residue trust on B’s death, as part of the house is for IHT purposes treated as being owned by the son.
At the moment HMRC are resisting a claim for joint owners discount as they say B had a life interest in A’s share of the house, so it is aggregated with B’s share of the house for IHT purposes. Is this a way to try to obtain the discount?