I am dealing with an estate, where the net value is approximately £2.135m. There are full NRBs and RNRBs available, as well as those from his late wife’s estate.
Approximately £200K of the estate is made up of asset due to this estate, from his late wife’s estate, which has not yet been concluded. The beneficiary from the estate is the deceased’s only daughter.
The wife died in March 2019, so I am looking to vary the late wife’s Will, so that the assets still in her estate pass instead to the daughter, rather than via the husband’s estate, to avoid the tapering provisions.
I realise the the NRB and RNRB will be affected as a result and that the wife died when the RNRB was only £150K. However, I think that, despite this, it will be worthwhile going down this route.
I would just be interested in hearing other people’s views as to whether this is option is viable and whether I have missed anything preventing me from doing this.
Harold Bell Infields & Co
Martyn, varying the wife’s estate does look like it would be worthwhile in this case. The current value of the husband’s estate would mean that £67,500 of RNRB would be lost to tapering. If the variation were effected there would be no tapering on that estate and at worst, if the RNRB were consequently used by the wife’s estate (you don’t state if she ownded a share of the house), this would reduce the effective value of her (share of) the RNRB to the 18/19 Residential Enhancement level of £125,000 (not £150,000 as you stated if her death was March 2019) on first death rather than the level for a later year on second death (you don’t state when the husband died so I’m not sure which year applies). So the variation would recover a net amount of somewhere between £17,500 (wife’s RNRB used in 18/19) and £67,500 of RNRB (if 100% of wife’s RNRB brought forward to 20/21) which would be worth the effort in any event.
Capital & Professional Consulting Ltd
I have done a few cases very similar to this. This highlights the issues of leaving all the estate to surviving spouse on 1st death and not using the available reliefs at that time, then losing out on RNRB on the taper. Thankfully we still have DoV’s and long may this continue. Sounds like a good plan.
If you are worried about the lower RNRB for the wife, just vary to use the NRB and leave the RNRB to carry forward to the second death, then claim the additional £175k then.
Countrywide Tax and Trust Corp