I am advising two daughter executrixes on any mechanisms to avoid IHT payable by their mother’s estate and wondered if anyone had any thoughts as I can’t quite see a way without a deed of variation which is too late. Their mother and her sister owned a property jointly. The mother created an IIP Trust so the sister could live in the property for life. The mother died three years ago. The sister died last year. Each had a £450k share of the property and the mother’s is being taxed under the sister’s estate with limited NRB. There is IHT to pay by both estates but the mother’s estate has £1m of NRBs and the daughters wish to take advantage of that. Any ideas?
When was the (share in the) property settled? What does “taxed under the sister’s estate mean”?
If there is tax to pay on both estates surely that means the mother’s NRBs have already been fully used?
Thanks Duncan. I should have been clearer that the trust bears the tax for the mother’s share. The mother had £1m of NRBs and a £600k estate when she died. The sister’s estate is valued at over a million including the property share.
Settled pre 2006, in 1990s.
Presumably the mother’s half share was not in her estate when she died as a result of the settlement.
If so, I don’t see that anything can be done. If it was taxed on mother’s death, QSS might be available.
Thanks Andrew, that is correct and I can’t see they anything can be done as a result.