In 2008 A dies creating a NRBDT. A has made lifetime gifts so only 90% of the NRB is available. The Trust is set up and constituted on this basis. For the purposes of calculating the 10 yearly charge, do forum members agree that it is 90% of the present nil rate band that is now available for the purposes of calculating the effective rate etc?

The lifetime gifts are added to the current value of the assets to work out the settlement rate, but for this purpose the current NRB is deducted at the full amount.

With regards to the lifetime gifts, these were PETs and not LCTs. The IHT100d refers to “chargeable” transfers in the 7 years prior to death having to be brought back into account. I had taken it from this that PETs were not brought back into account. Always dangerous to assume but am I correct in my assumption?

I think if yes to the assumption re: PETs it has to follow that 90% of the current NRB is available.

It is misleading to refer to “90% of the nil rate band” in this situation. Percentages of nil rate bands apply to transferrable nil rate band and residence nil rate band calculations, but not to the 10 year charge calculation. You need to deal with the absolute figures here.

In 2008, the NRB was £300,000 or £312,000. If 90% was available, presumably you mean that 10% had been used up by lifetime transfers, say £30,000. It is the fixed £30,000 which enters the 10 year calculation, notwithstanding that the NRB is now £325,000. You could therefore say that 90.77% is available, but the calculation is not couched in those terms. The nil rate band available, as such, will be £295,000.