A client has instructed me to prepare a new will, his wife died last year and her will (not drafted by me) contains the following clause:
‘I GIVE to my Trustees such a sum as can be transferred on my death without being chargeable to IHT at any rate above the nil rate of tax UPON TRUST absolutely for my son and daughter’
He is not included as a beneficiary so it does not look as if we can do a Deed of Appointment and terminate the trust that way.
Is there any way we can preserve her nil rate band so it can be transferred to him when he dies or has it been lost through this legacy?
Hello,
I’m assuming the mother left a gift of £325k to S and D and the balance of the estate to H under the spousal exemption?
Richard C. Bishop
The NRB has been left to the children so the NRB can be restored by them giving it to the widower by deed of variation.
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On this assumption. A DofV would have been my advice. Agree with Andrew.
Richard C. Bishop
You can’t do a variation over a Trust because of the difficulty with getting all the beneficiaries involved (amongst other difficulties), however the legislation (IHT’84) makes specific provision in section 144 that if you wind up a trust within two years and before any IOP has subsisted it is as if it never existed (I paraphrase) so if you can find a way to appoint the whole thing out satisfactorily to suit the requirements you have then the problem is solved and the TNRB recovered.