S.144 IHTA and RNRB

I have an estate with an NRBDT and a FLIT for the surviving spouse with discretionary powers to benefit the deceased’s children. Spouse is wealthy on her own and is happy to relinquish her interest in the estate.

The current plan is for the NRBDT to be wound up in favour of the deceased’s children, widow to disclaim her interest in the FLIT and Trustees to also appoint that to the children within 2 years of death to (hopefully) obtain the benefit of the RNRB.

My question is really, would s.142 IHTA apply such to mean that the life interest had never subsisted thereby allowing s.144 IHTA to write back the appointment from the FLIT to the Will, resulting in an absolute gift of the whole estate to the children and thereby allowing us to claim the full RNRB?

I would rally appreciate others opinions on this!

A s.144 appointment can follow a s.142 disclaimer or DOV, and the s.144 appointment will be read back in the way you suggest.

I would always normally use a DOV, as this is more certain to have the effect you want.

I am not clear on the terms of the Will. Is it a life interest with reverter to a discretionary trust on W’s death? If so this should work. If the reverter is other trusts, and the overriding powers of appointment in favour of the children only apply while the life interest subsists, it will not work, as the powers of appointment would lapse when the life interest is terminated by the DOV.

So you need to be clear on the effect of giving up the life interest, and what the reversionary trust are before doing anything.