Life Interest Trust created in Will

Trusts Discussion
1

Life interest Trust created by husband in a will where the wife (legally married) is the life tenant (post husband’s death) for main residential property and BTL’s properties. All the properties are in husband’s sole name.The trust period kicks in once husband passes away. Is general IHT NRB and residential NRB available when husband passes away? Sorry, this may be a simple question but slightly worried as all properties in husband’s name and value of his estate more than £2M. Any comments will help. Thanks Sunil

2

The life interest for the wife created under the husband’s will qualifies as an IPDI. In which case, no IHT arises on husband’s estate due to the inter-spouse exemption. Hence, no need for NRB or RNRB.

Malcolm Finney

3

Thanks Malcolm. Much appreciated.

4

Just remember that the TRNRB will not be 100% as the husband’s estate is over £2m

5

Thanks Kim. Oh yes, where the net estate is over £2M the RNRB will be reduced by £1 for £2.
Believe that is over £2.35M or £2.7M where someone has inherited full RNRB from deceased spouse.

6

With a view to preserving the full RNRB and depending upon the age and health of the life tenant and in the hope of surviving seven years, she may wish to consider giving up her life interest in part of the trust fund as well as making gifts from her own estate.

Patrick Moroney

7

Thanks Patrick. Thats a very valid point.