Transferable RNRB, available for Disc Trust in survivor's Will?

I think this may be a case of clutching at straws, but any replies appreciated as always:

Say W dies in 2010. H creates Discretionary Trust (DT) for max amount IHT free in his Will for whole estate, inc property. The property was jointly owned with W. H loses RNRB as estate to DT, but does Hs estate have use of Ws RNRB even though his estate, inc property, to pass to DT, therefore not direct descendants?

Karl Taylor
Parker Rhodes Hickmotts

If I have understood the hypothetical (?) situation correctly, W died in 2010, presumably leaving her estate to H, who has since died.

H leaves his estate on discretionary trusts.

Whilst the estate of H would be entitled to claim carried forward RNRB in relation to W, as no qualifying property passes to qualifying beneficiaries both H’s and W’s RNRB are potentially lost.

However, should the discretionary powers under H’s will be exercised within 2 years of his death, the result of which is that the property is treated for IHT purposes as passing to qualifying beneficiaries by virtue of s.144 IHTA 1984, both H’s and W’s RNRB may be available to reduce any potential IHT charge arising on H’s death.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

It depends on when H died. If still within two years then TNRB and RNRB (x2) can still be claimed, using reading back provisions/appointing to descendants.

Haroon Rashid
I Will Solicitors Ltd

Nothing wrong in clutching at straws but in this case i don’t think it helps.

W’s unused RNRB may be claimed by H’s PRs and is referred to as the brought forward allowance. This allowance may in principle be used against H’s estate but, as you indicate, no lineal descendants of H appear to be inheriting the property.

Malcolm Finney

I assume that you are referring to a NRBDT Will and the total estate (H&W) is now above the basic NRB? If so, where do the assets falling outside of the NRBDT go? Is there any chance to put non-property assets through the DT and property assets (or part of them) outside the DT to direct lineal descendant directly?

Philip Baldwin
Bray & Bray