I act for trustees of an IPDI that has ended following death of life tenant. I am seeking to report the trust’s end for IHT purposes with an IHT100.The trust’s sole asset is a property worth c.£400K.
The settlor and life tenant were not married and the settlor’s NRB was used on her death. I understand the life tenant’s estate is nil. I appreciate the value of the IPDI aggregates to the life tenant’s estate. I anticipate his NRB should be available in full and should be apportioned between the trust’s title and his personal estate which is negligible.
My difficulty is the life tenant’s family are not inclined to assist my trustees and will likely not report the aggregation with the life tenant’s estate.
Has anyone encountered a similar issue that can suggest how we can obtain the benefit of the apportioned NRB?
If the life tenant’s estate is negligible, is the family likely to even consider applying for a grant, let alone completing any HMRC forms?
I suggest the IHT100 is submitted to HMRC with a covering letter setting out the details of the estate so far as you are aware and providing contract details for whoever you have been dealing with (or trying to deal with). It will then be for HMRC to follow through.
If, as suspected, the life tenant’s estate is of negligible value, should they have occupied the property as their residence at any time whilst it was within the trust, RNRB may also be available to help reduce/eliminate any potential IHT charge on the trustees. However, as this would appear to be “supposition” the trustees would be well advised not to distribute the trust fund without retaining sufficient to satisfy any potential IHT liability should the “supposition” be ill-founded.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Thank you for your comment. What you suggest is what I thought would be sensible to. Thank you for your comment on the availability of RNRB. On this occasion this won’t be available as none of the trust or life tenant’s estate goes to lineal descendants.
Dear Paul, my query is not directly related to the discussion thread but wondered if you can help. We’ve submitted an IHT100 to HMRC following the 10-yr anniversary and we now need to file an amendment. Are you aware of any form that would be required or is a letter explaining the position sufficient? Many thanks