A deed of variation created a trust of a property (as if it were a specific gift). The property had actually been sold by the time the deed was executed, so at that stage there was only cash to go into the trust.
The start date of the trust for IHT is the date of death, but I am struggling to decide on the initial value of the trust fund. Is it the probate value of the property, or the cash proceeds available at the time of the DOV?
This is important because in this case it will determine whether the initial value is above or below the NRB, but I cannot find an answer.
Another question I am struggling with in the same case is at what point did the trust property become relevant property for IHT purposes? Is it the date of death or the date of the DOV? If it is the date of the DOV, then s66(2) IHTA will apply to reduce the rate of tax at the 10 year anniversary. I would have thought this question is relevant to all trusts arising on death, because there will usually be a delay between the date of death, and the date when the assets are transferred to the trustees, but again, I don’t seem to be able to find an answer or any example calculations addressing the point.
Any help or thoughts would be much appreciated.