Nil rate band discretionary trust

[denver]

Having read various opinions on Taxationweb we appreciate the IHT advantages of “nil rate band discretionary trust wills” and have already changed our property to tenants in common.

To keep options open we were thinking of leaving our wills as they presently stand (everything left to the surviving spouse) and then relying on a deed of variation for the surviving spouse to set up a nil rate band discretionary trust, should that be best suited to the circumstances at the time when one spouse dies.

Is there a risk that this course of action might prevent the setting up by the surviving spouse of a nil rate band discretionary trust in favour of our children by a deed of variation execuated within the permitted two years

[Peter D]

Do not rely on a DOV they are going to reviewed in 2011 and there may be limitations place on what can can do with them. I always recommend setting the paerwork and the NTB Wills in advance. Remember the Trust is only triggered in the even of one passing away. Do not leave this to chance. Regards Peter

[Lee Young]

When in opposition in 1994 the Labour Party (Old Labour?) published a paper entitled "Tackling tax abuses" and one of those they were to tackle was deeds of variation - they have not yet done so, every Budget we fear something might happen, so, to echo Peter's view, do not rely on the ability to vary an estate in a tax efficient manner. after death The rules can easily change!

Even if there is a trustin the WIll, they are so flexible that if the survivor decided he/she does not want it, it can be brought to an end on day one without any issues (other than the loss of the potential IHT saved).