In 1999 our client created a Discretionary trust the beneficiaries being his widow children and grandchildren. In 2014 he made a further Discretionary trust with the same class of beneficiaries.
Since the inception of both trusts there have been no additions beyond accumulated income and no exits.
As far as we are aware, the settlements although similar are not related.
Can someone please advise whether both trusts have their own full NRB of £325,000 or is there a single NRB split between them as this will impact on the (overdue) 10-year charge return.
Under s62 of the Inheritance Tax Act 1984, only when relevant property trusts are created on the same day and have the same settlor, would they be treated as being related settlements and aggregated for the periodic charge calculation.
So, by writing them on separate days, and in this case 15 years apart therefore also avoiding the 7 year clock, each trust is treated independently, giving each one its own nil rate band.