I am dealing with the estate of Mr C and his will simply leaves residue to his two children. No legacies and full NRB and TNRB available (no RNRB).
The children both wish to secure the reduced rate of IHT by leaving 10% of the baseline amount of the general component to a charitable beneficiary. The estate administration is very complex indeed and HMRC have raised enquiries, so rather than leave a fixed legacy, the Deed of Variation will make reference to the STEP model clause so that the amount can be calculated when the IHT estate has been ascertained.
Where should this model clause appear - before the definition of residue or is it a residuary legacy and then the balance of residue passes 50/50 to the children?
If a residuary legacy, will we need to include a Re Ratcliffe or Re Benham clause (or neither) when dealing with who bears the IHT? Would the normal considerations apply when deciding which one is best to use or is there anything else we need to consider?