A single client has an estate of circa £600k. This includes her residence. There are two children she wishes to benefit but doesn’t want them to have funds before 30. They are teenagers at present. The client does however want to maximise the RNRB claim…
Clearly a Will leaving the estate to child A and B no attaining 30 will not suffice if the client dies before they fulfill the contingency.
We have discussed leaving the estate into a DT with power to appoint out within 2 years but the client was not keen.
Would an absolutely gift equal to the value of the available RNRB at the time of death to the children without age contingency ensure that the Executors could claim the full £500k allowance? I have my doubts as it is not linked to the property interest.
Any other thoughts / views welcome!
You may have already considered this, but a simple IPDI trust for the two children might suit. The IIPs need only extend to a portion of the property equal to the sum of the Residence Nil Rate Band in order to secure the relief and even then could be revoked (to leave a wholly discretionary trust) after a short period if distribution of part of the trust income is not desirable. James Kessler’s book gives precedents by which to carve-out such an interest.
As you Indicate, a child who become entitled to a qualifying residential interest on attaining a specified age (eg 30) will not inherit if the child has failed to attain that age on the death of the testator (except if the trust is a bereaved minor’s trust or an 18-25 trust).
For the RNRB to be available on the testator’s death a qualifying residential interest must be closely inherited on death (subject to down-sizing relief). Simply providing for an absolute gift equal to the RNRB will not enable the RNRB to be claimed.