UK Will - Bare or Relevant Property & RNRB

Trusts Discussion
1

I think I know the answers but would appreciate confirmation (or otherwise!):
My client is a single parent with one child (who is a minor).

Their Will currently states:
"I give the whole of my residue estate unto my Trustees UPON TRUST…
… for as shall survive me and attain the age of 25 absolutely provided that is shall fail to attain a vested interest leaving children then such children shall take on attaining the age of 25 such share of my Residuary Estate as such child of mine would have taken if he had survived me and attained a vested interest.

IF THE trusts hereinbefore declared shall fail or determine my Trustees shall hold my Residuary Estate on trust for <a named person who is not a partner/civil partner/relative> sa shall be alive at the date of the failure or determination of such trust absolutely"

I have 2 questions.

  1. I believe that as the child’s / grandchild’s interest is contingent on attaining 25, etc., then the trust created is a relevant property trust (until vested interest arises) rather than a bare trust. Is this correct?

  2. Because the trust created is Relevant Property, the estate cannot use the Residence Nil Rate Band as there is no definite qualifying beneficiary. Again, is this correct?

Many thanks for any assitance.

2
  1. It could be an 18-25 trust but if the child was over 18 when T died, and s.31 isn’t amended, the child will have an IPDI as a result of s.31(1)(ii).
    [neither is relevant property, although that is incidental]
  2. Both an 18-25 trust and an IPDI would qualify as “inherited” by the child under s.8J.
3

If client dies now, and child is a minor would the position be different?

4

Then it would likely be an 18-25 trust. This is not relevant property but there can be an exit charge. RNRB should apply, assuming the other conditions are met.