GRoB in property. Valuation discount not available?

Trusts Discussion
1

Think I’m clutching at straws here but…

H&W settle their house into Trust but still live in it so a GRoB. H now died. With other failed PETs and GRoB, leads to IHT liability of just over £4K. Am I right that the 10% joint property discount is not available on the GRoB as spouse still in the property (and house in the Trust?)

2

My reaction is that you should be able to claim the 10% discount.
Related property is property that is comprised in the estate of the spouse.
However, where gifts with reservation are concerned, the property in question is only deemed to be comprised in the estate of the person who made the gift at the moment of his or her death.
At the moment when H died his wife did not own a share of the property and was not deemed to own a share of the property.

3

Thanks Paul. That makes sense. And should remove the IHT in this case.