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Where Taxpayers and Advisers Meet

Will Trust and IHT

zaxtab
Posts:25
Joined:Thu Jul 09, 2020 9:08 pm
Will Trust and IHT

Postby zaxtab » Wed Apr 27, 2022 8:42 pm

If a Mirror Will has an IPDI Trust written into it where the spouses assets and half value of residence is left in Trust, at first death is the value of all of these assets IHT exempt wrt deceased’s estate?.

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Will Trust and IHT

Postby AGoodman » Thu Apr 28, 2022 9:50 am

Assets left on an IPDI to a spouse will be exempt from IHT except in a rare international situation (UK domiciled individual leaving to non-dom spouse)

zaxtab
Posts:25
Joined:Thu Jul 09, 2020 9:08 pm

Re: Will Trust and IHT

Postby zaxtab » Thu Apr 28, 2022 2:07 pm

Thank you…..Is the deceased’s estate in this form….held in trust, then still regarded as a’excepted estate’.,and would be stated as such when completing appropriate forms to determine if IHT is to be paid?

zaxtab
Posts:25
Joined:Thu Jul 09, 2020 9:08 pm

Re: Will Trust and IHT

Postby zaxtab » Thu Apr 28, 2022 3:45 pm

Am I correct in the knowledge that IHT 205 is now scrapped for ‘excepted estates’?

Does an excepted estate remain an excepted estate if gifts were made in the preceding 7years of death?

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Will Trust and IHT

Postby AGoodman » Thu Apr 28, 2022 10:08 pm

The excepted estate conditions are focused on the assets in the estate, not what happens to them under the will. Leaving assets on an IPDI will not take you outside of excepted estate rules. I have no way of knowing if the estate you are dealing with meets the other criteria.

Yes, I think IHT205 has been scrapped (it seems to change every week at the moment) and yes, gifts are a factor in the conditions. The rules were relaxed somewhat for deaths after 1 January this year but most of the details are available here:

https://www.gov.uk/valuing-estate-of-someone-who-died/check-type-of-estate


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