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Where Taxpayers and Advisers Meet

RNRB - residence held in a discretionary trust and the settlor has reserved a benefit

umeshg1
Posts:48
Joined:Wed Aug 06, 2008 3:55 pm
RNRB - residence held in a discretionary trust and the settlor has reserved a benefit

Postby umeshg1 » Sat Aug 13, 2022 10:10 am

A’s main residence was transferred to a discretionary trust. The potential beneficiaries are A’s two elderly children. It was assumed A will not pay inheritance tax (IHT) on their death as the property is in the trust. This is not the case as it will fall under the gift with reservation of benefit rules as A is still staying in the property without paying market rent. When calculating IHT on death, can the executors claim the residence nil rate band (RNRB) on A’s residence even though the main residence is owned by the trust?

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