I am dealing with an estate with an NRBDT and am currently in discussion with the family on related issues. The widow lives in the home (TiC). Sole state is £130K half share home and approx. £105K cash etc (rest held jointly), so well below the standard NRB. The son has asked scenario if all these assets appointed to them, including the half share of the property. While I am not in favour of appointing the half share out to him and his brother, just so that I can respond directly to this query, would doing so remove the transfer of the RNRB available when the widow dies? I appreciate there is plenty of scope with NRB.
I should add the widow is financially secure and well within available NRB/RNRB. She does, however, want her two sons to benefit from the Will. My suggestion had been to either appoint out circa £100K to the sons then create a LiT in the property, or appoint out the whole lot (maybe with LiT re property) and widow makes a PET (although she is 85). Widow actually wants to sons to have £100K each.
Thanks in advance
Whilst not stated, my comments below are on the basis the widow’s 2 sons are also the children of the deceased and are objects of the NRB discretionary trust.
I am inclined to suggest that £50,000 is appointed to each son, and the remainder to the widow, absolutely.
Once the widow is satisfied as to her financial position (towards the end of the year?), she might then make a deed of variation by which the half share of the house is deemed to have been given to her subject to the payment of (an additional) £50,000 to each son. The widow can then satisfy those payments out of her own resources, relieving the property of the liability.
Whilst this will reduce the extent to which her own estate will be able to claim her late husband’s transferable NRB, it will keep intact the ability to claim both residence NRBs upon her death and secure the proposed annual uplift thereof.
Thanks Paul. You are correct regarding the children. Another related factor is that they want to retain some asset protection, hence I have considered creating a Life Interest in the deceased’s half share of the property as this will, I understand, retain the husband’s RNRB with the proposed uplifts.
I am meeting one of the sons tomorrow and will discuss with him then.