A stepfather died in 1969 leaving a Will which left certain assets in trust with a life interest to his stepson, and then upon his death a life interest to the stepson’s wife. Upon both their deaths the trust then comes to an end and the capital is payable to their children. The stepson died in 2006 leaving his entire estate (subject to a couple of small legacies) to his wife. My question is whether for the wife’s estate who died recently we have any available transferable nil rate band?
It seems to me that the step-son’s NRB should be available in full to his widow’s estate.
If he died on or before 21 March 2006, the life interest would have been subject to spouse relief.
Should he have died on or after 22 March 2006, his widow would have acquired a transitional serial intertest to which s.49C IHTA 1984 applied so, again, the life interest would have been subject to spouse relief.
In either case, on her death the widow’s life interest would have been a qualifying life interest to which s. 49 IHTA 1984 applies.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
A. On the step-son’s death (ie termination of a QIIP;IHTA 1984 s 49) an inter-spouse exempt transfer occurs as the wife takes a successive life interest on the step-son’s death (a TSI; IHTA 1984 s 49D); no pre 6 October 2008 timing restriction. Assumes death of step-son occurs on or after 22 March 2006.
B. If death of step-son occurred prior to 22 March 2006 (ie termination of a QIIP) again an inter-spouse exempt transfer would occur.
Under A or B a transferable NRB is in principle available.
Malcolm Finney
Thank you Paul and Malcolm. That is very helpful.