Discretionary Trust and IHT

My client has a lifetime discretionary trust into which was placed her share of her house. The other share was her late husband’s and is now in a Will Trust on his death. An IFA has invested some money for her and also put the investments into the Trust. They do not produce any income, instead growing in value inside the Trust.
Her late husband did not use his NRB / RNRB so my question is: Does the Settlor have only her own NRB for assets entering the Trust or can she utilise her late husband’s also, effectively giving her 2x NRB allowance into the lifetime Trust? I think only one but the IFA thinks x2.

The wife on settling her investments into her lifetime DT is only entitled to her own NRB (adjusted for earlier lifetime gifts).

Her husband’s unused NRB is only available on the wife’s death for use against her own estate.

Malcolm Finney

1 Like