Release of NRB debt

First spouse dies 2003. Will includes NRBDT. Trustees enter loan arrangement with surviving spouse for value of NRB. In March 2015 by Deed of Appointment the debt is released to the surviving spouse. Value of the estate has significantly increased in value since 2015. Surviving spouse has recently died. The estate will be subject to IHT.

I have never seen a NRB debt being released to a surviving spouse. Am I correcting in assuming that there can be no claim for unused NRB as the Trustees released the debt?

That is my understanding.
The gift to the trust used the first spouse’s NRB, but the debt owed by the surviving spouse to the trust replaced that, so surviving spouse’s estate was effectively in the same position.
The nonsensical release of the debt to the surviving spouse put that value back into survivor’s estate, so all assets are in that estate, with no debt and only one NRB (plus any RNRB/TRNRB) to set off.

Michael Cutler
Colemans Solicitors