A client’s mother passed away in 2023. The Will is a DWT of the entire estate, including the spouse as a discretionary beneficiary. The clients did not want to go for a life interest trust trust.
Probate was not granted in the mother’s estate nor was the trust dealt with.
The father died last year and they’re now looking at having to obtain a GoP. Is there anything that can be done to restore the transferable NRB here given that no life interest was generated nor s144 appointment undertaken?
Has the two-year time limit for s.144 and s.142 passed? If so, I would say there is nothing that can be done.
We are just about in the 2 year period of the first death.
I believe you can make a s.144 appointment and then that person makes a s.142 variation. However, you need to avoid the s.142 variation being made for consideration and you need to avoid there being a fraud on the power.
As the husband has died, the power of appointment can no longer be exercised in his favour as he can no longer be a beneficiary.
If Legal Beagle’s suggestion is that an appointment is made followed by a variation in favour of the husband, which I understand is accepted by HMRC notwithstanding he is deceased, I suggest before dong so a comparison is made of the tax position if matters just take their course, or if such an arrangement might be implemented. If there has been any significant increase in the value of the assets within the wife’s estate, by looking to effectively combine the estate for IHT purposes in the husband’s estate this could increase the IJHT liability as the uplift in values would be subject to tax in his estate.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Thank you Paul. Yes, my concern is that there is a significant increase in one of the assets. And I was wondering how this would interplay with any possible variation.