Reading Back s144

W dies leaving a NRB Discretionary Trust in her Will, with residue to spouse on life interest trusts. W’s estate comprises her main home valued at say £925,000. If the trustees appropriate £325,000 of the home into the DT and then appoint £175,000 to a child within 2 years under s144, does this mean W’s RNRB is used? Further, if the remaining £150,000 is appointed to spouse, does this mean the NRB remains unused?

Essentially applying the s144 reading back provisions, is not the Will read as if £175,000 went to a child and £150,000 went to spouse, (along with the residue). Therefore RNRB applies?

My understanding is that when calculating the IHT liability the RNRB is deducted before the normal NRB and that the RNRB is automatic if the provisions are met so at the point when s144 bites the RNRB is triggered.

But you have to claim the RNRB

I am not sure you do have to claim. You have to complete IHT402 to show the estate qualifies but when I looked at this a few months ago I could not find anything within the legislation that required this to be claimed (and I have also seen other commentary on the RNRB along the same lines) - only unused RNRB from the deceased spouse requires a claim but I would welcome others views

I agree. It automatic but iht 4002 should be lodged and a record kept of it.

Simon Northcott