Nil Rate Band Discretionary Trust and Residential Nil Rate Band

Trusts Discussion
1

Hi All

I have a Will which incorporates a NRB discretionary trust with usual wording leaving the maximum cash sum. The deceased has a surviving spouse (no previous marriages) who receives the residue. The estate is worth c£575,000; the half share of the family home is worth c£175,000 (held as tenants in common). The spouse would like to utilise the RNRB on first death. I just want to check that it’s as simple as doing a Deed of Variation leaving the deceased’s half share to the children outright (these are the spouse’s wishes) on the basis that the half share of the house falls into residue. We will make the claim with HMRC. The NRB can be met by cash and other assets being appropriated to the trustees. The intention is to keep the NRB discretionary trust rather than to make an appointment out within two years.

2

There is enough cash to fund the NRBDT.

There is a balance of cash £75K plus property interest which pass to surviving spouse as part of residue.

Do husband and wife have joint children. If so leave it as it is and there will be claim on surviving spouse’s death for both the RNRB and the TRNRB.

Not ideal for survivor to live in a property co-owned by children- very risky in fact. Plus you’ll be incurring a big CGT liability for the children if you do it this way. Let spouse inherit the home, leave it on her death and the kids can enjoy the uplift.