I have an estate with the following clause in the Will:
“I GIVE to my Trustees the maximum sum (if any) that I may give to them without resulting in a liability to pay Inheritance Tax on my death (after taking into account any chargeable transfers or other dispositions which are chargeable or deemed to be chargeable on my death for Inheritance Tax purposes whether effected by this my Will or otherwise)…”
There are other chargeable legacies totalling about £15,000. The residue is left as to 20% for charities and as to 80% for non-exempt beneficiaries. There is IHT to pay on the estate.
I have advised that the maximum sum is nil, by applying RSPCA v. Sharp and more recently Beasant v Royal Commonwealth Society for the Blind & ors.
A solicitor friend of one of the executors has disagreed with this and said that the legacy is of the available balance of the nil rate band, i.e. around £310,000.
Under the Will, the residue passed to the spouse in the first instance and the clause would have worked to pass the balance of the NRB, if the order of deaths had been the other way around. However, as the spouse predeceased, there is IHT to pay on the estate, which on my reading reduces the maximum amount due under the above clause to nil.
I have read other strings on the forum on this subject, but just wanted to check the current consensus and make sure I am not out of date on the case law.
Many thanks
Steve Carter
Consultant Solicitor
Setfords Solicitors