Two Settlors One Discretionary Trust

Trusts Discussion
1

Hello

I wanted to clarify the position where two settlors settle an equal sum of money (cash) of £300 000 each into one discretionary Trust. For the purpose of calculating the 10 yearly charge, is there one nil rate band available (£325,000) or two nil rate bands available (£650,000).

Many thanks.

Michelle

2

Each person is usually treated as having made a separate Trust and therefore I believe each have their own nil rate bands for the purposes of the ten year anniversary charge. See IHTM42253.

Ihsan Ali
I Will Solicitors

3

Hi Michelle

There are two nil rate bands. Two full sets of IHT100 and supporting pages are needed as each settlor’s IHT history needs looking at separately. Even if they haven’t made CLTs before the £300k, you need to go through the questions so HMRC can see there is nothing to affect the availability of the NRB for each trust.

Sara

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4

Thank you Ihsan. That is very helpful.

5

Thank you Sara. I will have a look at the IHT100.
Much appreciated.

6

In addition to what Ihsan and Sara have said, you might note that there will only be one annual CGT exemption for the trustees, calculated by reference to the settlor who has made most other settlements (TCGA 1992, Schedule 1C).

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

7

Noted and thank you Paul.