Discretionary Will Trust (including RNRB) - Countrywide

Good afternoon,

A client showed me his Will which was drafted by Countrywide. One death the clients share of his estate (including his share of the main residence) will move into a Discretionary Trust.

What I am querying is why have countrywide labelled this as a Discretionary Will Trust (Including RNRB)?

My understanding is that any distributions from a discretionary will trust within 2 years of death are deemed to have been made by the deceased in the will. If an appointment had been made to a direct descendant, then it would be treated for IHT purposes as if the assets had been left to the direct descendant outright and, the RNRB would be available.

If it were the surviving spouse for example then I would image an IPDI (for the deceased’s spouses share of the main residence) can be created and the RNRB would still be available on second death as long as this happened within 2 years of death.

Is this what Countrywide are referring to when they say ‘including RNRB’?

I don’t think there’s any magic. It’s just a bit of marketing.

I seem to recall some time ago looking at something produced by Counytrywide where, in I believe the Discretionary Trust terms, there was some provision designed to ensure that if the trustees failed to appoint out property from the DT (to a lineal descendant) either on an IPDI or absolutely within the two years post death (and hence RNRB would be lost) that a default provision would “kick-in” under which the RNRB would be claimed.

I seem to recall that they assumed the RNRB had to be claimed which is not in fact the case.

Malcolm Finney

Thank you Malcolm,

Much appreciated.

Regards

Jeevan