RNRB following lifetime trust

[I have looked through the many previous posts on this topic and I don’t think any of them covers this situation. If I have missed something relevant, please forgive me.]
The deceased and his partner (not married, not CP) bought their residence together, executing a declaration of trust which defined a tenancy in common and gave the last survivor a right of occupation for as long as he/she wishes.
The Will of the deceased leaves the residue of his estate to lineal descendants.
Is RNRB available to the estate?

Michael Cutler
Colemans Solicitors LLP

This might help IHTM46014 - Basic definitions: ‘Inherited’ - HMRC internal manual - GOV.UK (www.gov.uk)

I have assumed it is settled property with the partner having an immediate interest in possession.

As the property has been left on trust for a partner no RNRB is available on his death.

And as the survivor has been given an interest in possession then on her death as the remainderman are not her “lineal descendants” there will be no RNRB.

If they had been married then they would have been entitled to transfer his RNRB and on her death his children (her step children) would have been within the lineal descendants definition.

Kim Jarvis

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As the trust is an inter vivos trust, if created on or after 22 March 2006 even should the parties be married, I do not believe the survivor’s interest in possession would be a qualifying interest in possession, instead the trust being subject to the IHT relevant property regime. In which case, regardless of whether the interest in remainder is “closely inherited” RNRB would not be available in respect of the property in trust.

However, perhaps downsizing relief might be available in respect of any previous residence owned by the survivor.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Many thanks to both of you.

Michael Cutler
Colemans Solicitors LLP