NRB Discretionary Trust - IOU/Debt scheme

I am administering an estate where the Will (2007) leaves a NRB discretionary trust. The whole estate falls within the NRB allowance and includes a small ISA holding and 50% interest in the family home (£225k).

The Will does not incorporate the STEP provisions and does not have any express provisions about the trustees being allowed to accept and IOU in satisfaction of the legacy.

The family would like to do the charge scheme and accept and IOU from the executors with an equitable charge over the property, their objectives are to keep the administration of the trust simple but ensure the home is protected from care home fees if needed. I have a few questions;

  1. Are the trustees able to accept an IOU and charge the property without any express authority in the Will/trust deed?

  2. The Will does allow the trustees to make interest free unsecured loans to beneficiaries - is it possible to make a loan to the beneficiary of the property without SDLT being chargeable?

  3. Finally if the Will did contain the STEP provisions do these give enough flexibility to the trustees to accept an IOU etc?

Thank you all in advance.

Helen Green
McHale and Co Solicitors

In the absence of the appropriate powers, for the avoidance of doubt I would grant the surviving spouse a flexible life interest. Much simpler and you preserve the TRNRB and TNRB, without all of the other attendant complications and uncertainties.