Four key IHT planning tips for residential nil rate tax band
By Mark Battersby, 15 Mar 17
Some changes in inheritance tax law can affect wills and trusts, including the introduction of the first tranche of the Residential Nil Rate Band (RNRB) of £100,000 on 6 April 2017, says Karen Clark, tax partner in charge of the London private client team at RSM.
The RNRB will not be available on transfer of the property to ‘relevant property trusts’ such as a discretionary trust even if the only beneficiaries are the testator’s children/grandchildren.
A typical grandparental settlement ‘to such of my grandchildren as reach 21’ will not qualify if the grandchildren are minors at the date of the testator’s death because that is a relevant property trust.
To secure the RNRB the grandparents would need to opt for a bare trust or an IPDI trust. 18-25 trusts and Bereaved Minors Trusts can only be created by parents.
Tags: IHT | Wills And Trusts
