I would be grateful for a second opinion.
I am dealing with an estate of a lady who died in April having settled her property into a life interest trust in favour of herself in 2007.
Clearly we have a reservation of benefit as she remained in the property up to the point of her death and that has been reported on the estate’s IHT400 but after allowing for the transferable nil rate band, no inheritance tax will be payable.
What I am concerned about is whether or not we need to file an inheritance tax return for the ending of the trust when she passed away. The trust deed provided the deceased with the interest in the trust for life and on her death the property passed to her four children absolutely. The value of the property at the date of death is £310,000 so within the nil rate band amount but over 80% of the nil rate band as mentioned in the excepted settlements regulations from 2008. At the date of the 10 year anniversary in 2017 the property was worth £240,000 and so within the 80% figure.
I don’t see that I have a liability in the trust on the death of the life tenant/settlor but do I have a reporting requirement? All comments gratefully received.