2nd death non-taxable estate with life interest trust

[kamsamji (Kamlesh Samji)]

Hi all,

I think i know the answer, but hoping I have missed something.

H died in 2023, left a life interest in the house to spouse (remainder to children) and residue to spouse.

Spouse has now died and gross estate is £830k. Everything passes to 3 children. The half value of the house is £262,500 (full value £525,000). At best, the house might be valued at £500,000.

I suspect this won’t be an excepted estate as, whilst there is only one trust, it is over £250,000. Regardless of the rest of the estate falling below the available thresholds. Am I correct?

Kam

[Karl (Karl Taylor (TEP))]

You are correct, it is a non-excepted estate.

[gavin.fernandes]

@kamsamji

H died in 2023, left a life interest in the house to spouse (remainder to children) and residue to spouse.

Spouse has now died and gross estate is £830k. Everything passes to 3 children. The half value of the house is £262,500 (full value £525,000). At best, the house might be valued at £500,000.

I suspect this won’t be an excepted estate as, whilst there is only one trust, it is over £250,000. Regardless of the rest of the estate falling below the available thresholds. Am I correct?

Kam

Hi Kam,

I have had one of these recently so looked into it too. I also agree that it is a non excepted estate due to the trust value being more than £250k and hence needed to complete both IHT400 and also IHT418.

[kamsamji (Kamlesh Samji)]

Thank you all. Disappointing, but I had a feeling.

Many thanks

Kam