We have a situation where deceased died October 2019 leaving half share of house I trust for wife and children and grandchildren with duty to appoint out within 2 years of death. Wife has now died.
The house is being sold for considerably than the value for probate on the first death.
Is it possible to appoint out to wife now (even though she has died) prior to application for her probate as that would enable us to use TNRB an TRNRB and avoid CGT?
It is not possible to make an appointment from a Discretionary Will Trust in favour of a beneficiary who is not alive at the date of the appointment. (IHTM35183)
It may be possible to make an appointment in favour of wife’s estate (with her estate being added as a beneficiary if the Will allows) but I have never come across this and I am not sure if HMRC will accept.
What happens if there is no appointment within the 2 year window?
If the wife is the default beneficiary, perhaps her entitlement could be accelerated if the trustees are able to release the power of appointment. I believe that s.144 IHTA 1984 should apply in such circumstances.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals