Claiming 36% charity exemption when there is a Life interest first

Trusts Discussion
1

Hi everyone

I have an estate where the property is left to the deceaseds partner for his lifetime and then upon his death, 50% goes to charity and 50% to the deceaseds son.

I know I lose the RNRB because it is not closely inherited, but by the same reasoning, does that also mean I can’t claim the reduced rate of IHT and charity exemption because the charity isn’t receiving their benefit until the life interest comes to an end?

Thanks :slight_smile:

2

Hi Sarah, did you get a response on this one please as I have something similar in a matter I am dealing with? A partner instead of a son and 100% going to a charity after the LIT comes to an end. Thank you

3

Hi

Yes, I did. I spoke to the legal team at a cancer charity who looked into it for me, and they confirmed that you can’t claim the reduction because of the LIT :frowning:

4

Thanks Sarah , it’s a shame as the partner will need to pay IHT on the LIT although it would have been the same if it was an absolute gift

Lee

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5

Probably no consolation to the partner, but at least the reduced rate may apply to their estate on their eventual death.

Paul Saunders FCIB TEP

Independent Trust Consultant

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