Transferrable Residence Nil Rate band and interest in possession trusts

[smarkham (Sarah Markham)]

Am I right in thinking that if husband and wife create interest in possession trusts in their wills leaving their half share of their home to the survivor of them for life and then to their children on the second death, the TRNRB would be available as well as the RNRB on second death?

Would this also be the case if for example the first spouse to die left their share of the property to non linear descendants so that on the second death, half of the property passes to non lineal descendants and the other half does on the basis that the full value of the property would be included in the value of the second spouse to die’s estate for inheritance tax purposes.

Does it make any difference if it is a lifetime trust?
Thank you

[andrew.goodman]

@smarkham

Am I right in thinking that if husband and wife create interest in possession trusts in their wills leaving their half share of their home to the survivor of them for life and then to their children on the second death, the TRNRB would be available as well as the RNRB on second death?

Yes

Would this also be the case if for example the first spouse to die left their share of the property to non linear descendants so that on the second death, half of the property passes to non lineal descendants and the other half does on the basis that the full value of the property would be included in the value of the second spouse to die’s estate for inheritance tax purposes.

Not exactly but the second estate could claim RNRB and TRNRB if the half share passing to descendants via their free estate was valuable enough (i.e. at least £350k to claim both in full)

Does it make any difference if it is a lifetime trust?

The widow would not have an IPDI so no spouse exemption on first death and the RNRB would not be applicable to the will trust on the second death

Answers in italics (obviously, but i had to write this to meet the minimum character requirement)