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Where Taxpayers and Advisers Meet

2 Seperate NRB avaliable for Trust

Andrew01
Posts:26
Joined:Wed Aug 06, 2008 3:27 pm
2 Seperate NRB avaliable for Trust

Postby Andrew01 » Wed Feb 16, 2022 5:37 pm

Hello IHT Forum

On the death of the second parent (married couple), if none of the NRB of the first parent to pass was used,
eg spousal exemption.

Would on the death of the second parent.
Could 2 Separate NRB's be available for a Trust or 2 separate Discretionary Trusts?
Would want to make use of the full NRB of both deceased for ten yearly IHT charges.

If 2 NRB would not be available then it may be advisable to create trust on the first death.

Regards
Andrew

maths
Posts:8447
Joined:Wed Aug 06, 2008 3:25 pm

Re: 2 Seperate NRB avaliable for Trust

Postby maths » Thu Feb 17, 2022 12:59 am

An unused nil rate band of the first spouse to die may be transferred to the surviving spouse (possibly doubling the nil rate band for the survivor).

Two discretionary trusts set up on the death of the survivor are treated as "related settlements" and thus the rate of IHT charged on the ten year anniversary of either of them is affected (ie increased). Thus, setting up two DTs on death rather than one does not result in any IHT saving.

Andrew01
Posts:26
Joined:Wed Aug 06, 2008 3:27 pm

Re: 2 Seperate NRB avaliable for Trust

Postby Andrew01 » Thu Feb 17, 2022 5:54 pm

Thank you maths

I should remember the related settlements law for trusts created on the same day may have had an impact.
So creating multiple trusts will have no IHT NRB benefit.

To clarify
Any unused nil rate band of the first spouse to die may be transferred to the surviving spouse (possibly doubling the nil rate band for the survivor). OK
So potentially any trust or trusts created on the second death could have up to two full NRB available in this scenario?
And if two NRB are available the IHT ten yearly and exit charges would be based o two NRB?

Thanks
Andrew

maths
Posts:8447
Joined:Wed Aug 06, 2008 3:25 pm

Re: 2 Seperate NRB avaliable for Trust

Postby maths » Thu Feb 17, 2022 10:00 pm

Correct.


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