NRB Discretionary Will Trust, IOU and transferable NRB

Trusts Discussion
1

Dear all,

I am dealing with an estate where Mr died in 2006 and in his will he made provision for a NRB Discretionary Trust. The estate consisted of 50% share of property £206,000 and cash assets of £66,000. The will made provision for a NRB Discretionary trust with optional IOU.

Both 50% share of the property and all cash was appointed to the spouse in return for a IOU promise to pay on demand or on her demise.

Wife has recently passed away and I’ve recorded the liability against her estate. There appears to be circa £13,000 of Mr’s nrb remaining for transfer.

The family are unhappy that Mr’s full nrb is not available to transfer and I have been looking through the IHT manual in attempt to locate some authority to provide them however, I have been unable to locate this.

I have 3 questions, if I may?

1 Am I correct in stating that Mr’s estate used the nil rate band allowance of £272,000 of his available £285,000?

2 Am I correct in stating that only £13,000 (to be re-calculated at todays rate) is available for transfer?

3 Lastly, am I able to claim the transferable residence nil rate band? (property now in Mrs estate falls to direct descendants).

Thank you so very much in advance

Carmen Cottingham

2

  1. Yes. (Had Mr’s estate been appointed to the widow absolutely then that would have preserved his nil rate band, but the IOU means the NRB has been used.)

  2. Yes, today’s rate would be c£14,825

  3. Yes, as Mr’s estate did not use his RNRB, so this is available to be transferred.

Ihsan Ali
I Will Solicitors Ltd

3

Dear Ishan,

Thank you so very much.

This is extremely helpful.

With kindest regards

Carmen Cottingham