Residence nil rate band - existing trust - death of life tenant

I am advising the family of a lady who is a life interest beneficiary of her late husband’s will trust. The trust assets include the main residence in which she resides. Her husband died in 2002 and the property, owned by him passed in to the trust at that time.
The lady’s late husband was her second marriage. Both parties had children from their first marriage. There were no children from their own marriage. The purpose of the trust was to ensure that although my client had a life interest, but that on her death the property passes to the husband’s direct descendants.
I think I am right is saying that when her life interest ceases on her death, there will be IHT to calculate on the trust and on her own personal estate and the nil rate band will be apportioned between the two. But the question is whether any residence nil rate band will be available. Although I think it may apply, what is concerning me is the fact that the individuals to whom the property passes from the trust are the descendants of the husband who died 15 years ago.
I would be very grateful for views on the position.
Just as a further complication, during the trust’s existence the original residence was sold and a replacement residence acquired, although I do not think this should have any relevance.

Heather Cunningham
Harold Sharp Limited

All other conditions to one side and assuming that on the wife’s death the property is left absolutely to husband’s children from his first marriage, the RNRB will apply because the term ‘children’ within the definition of ‘direct descendants’ includes step-children. The wife’s estate will, subject to any taper restrictions etc., benefit from a RNRB and a full transferable RNRB on her death. Should the wife die on or after 6 April 2020, this could amount to £350,000.

Stuart Adams
Mishcon de Reya

I have a similar situation where the deceased was left a LI in his partner’s property but also owned a separate former residence which he has left to his own children. His partner’s property now passes to her children. I believe his RNRB can be used for his own former residence but can his partner’s RNRB be used against the IHT now due on the partner’s property as it is left to her children? They were never married so not his step-children. Thank you.

Lee Hibell
Paul Robinson Solicitors LLP

RNRB applies to the deceased’s former residence.

On the death of the deceased the IPDI terminates and the partner’s daughters take the property. However, the daughters are not lineal descendants, ie children/step-children (as partners not married) of the deceased, and hence no RNRB applies.

Malcolm Finney

Thank you Malcolm, even though the property he was living in passes to her children?

Kind Regards
Lee Hibell
Paul Robinson Solicitors LLP

My post is based on the fact that the deceased held an IPDI in the property which on his death passed to the children but who were not the deceased’s children but who were the children of his partner; as they were not married the children of the deceased not only are not his children but are not his step-children and thus not lineal descendants of the deceased.

Had they been married the children would have been the deceased’s step-children and the RNRB would have applied on his death.

Malcolm Finney