Quick succession relief definition

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Estate administration—interests in trusts and other estates

Estate administration—interests in trusts and other estates In administering the assets of an estate, there are some assets and liabilities that can be easily overlooked. As well as checking what assets and liabilities there are, the personal representatives (PRs) need to make decisions about which assets to deal with first as well as dealing with matters that they may discover affected the deceased in their lifetime, such as ongoing litigation. Interests arising under a trust The deceased may have been a beneficiary of a trust and in some cases, the value of the trust interest accrues to the deceased’s estate on death for inheritance tax (IHT) purposes. There are a number of types of trust that may have included the deceased as a beneficiary, namely: • discretionary trust—where the PRs are aware that the deceased was a member of a class of potential beneficiaries (or had a non-qualifying interest in possession in a trust) they should notify the trustees of the death and the trustees may request the...

IHT—reduced (36%) rate for estates leaving 10% or more to charity

IHT—reduced (36%) rate for estates leaving 10% or more to charity FORTHCOMING CHANGE relating to changes to APR and BPR: At Autumn Budget 2024 on 30 October 2024, the government announced an intention to significantly reduce the amount of APR and BPR on qualifying property from April 2026. Subject to consultation (expected in early 2025), the 100% rate of relief will be restricted so that it will no longer apply to the whole value of the qualifying agricultural or business property, but will instead only apply to the first £1m of combined value. See News Analysis: Autumn Budget 2024—Private Client analysis — Inheritance tax. On death, a person is treated as having made a transfer of value equal to the value of their estate immediately before death. Exemptions from UK inheritance tax (IHT) fall into three categories: • those that apply during lifetime only • those that may apply either during lifetime or on death, and • those that apply on death only The majority of...

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Where a married couple died in quick succession, each leaving assets on a nil rate band discretionary trust (NRBDT) by Will, how can the personal representatives deal with the NRBDTs in order to maximise the availability of the residence NRB (RNRB) and transferable RNRB?

Where a married couple died in quick succession, each leaving assets on a nil rate band discretionary trust (NRBDT) by Will, how can the personal representatives deal with the NRBDTs in order to maximise the availability of the residence NRB (RNRB) and transferable RNRB? The availability of the residence nil rate band (RNRB) to a deceased person’s estate depends on several factors, including: • was the death on or after 6 April 2017? • is there a qualifying residential interest (QRI) or qualifying former residential interest (QFRI) in the estate at death? • is the QRI/QFRI closely inherited on death by the deceased’s defined lineal descendants? • is the value of the QRI/QFRI which is closely inherited equal to or in excess of the RNRB threshold? • had the deceased survived a spouse/civil partner such that their estate may benefit from the transferable RNRB? • is the estate in excess of £2m such that the amount of the available RNRB is tapered? For an introduction and full...

If a testator leaves an immediate post-death interest in one of their houses in their Will, would the value of the house be within the life tenant’s estate for inheritance tax and is there any tax relief from that inheritance tax?

If a testator leaves an immediate post-death interest in one of their houses in their Will, would the value of the house be within the life tenant’s estate for inheritance tax and is there any tax relief from that inheritance tax? The value of the house would be subject to inheritance tax (IHT) on the death of the testator, but if the house has been occupied by the testator as a residence prior to their death, the residence nil rate band may be claimed by their executors. If the life tenant of the immediate post-death interest (IPDI) created by the testator’s Will is the testator’s spouse or civil partner, then on the death of the life tenant, relief may be available in the form of a brought-forward allowance. For further detail, see Practice Note: IHT—residence nil rate band. The value of the house would be chargeable to IHT on the death of the life tenant. For further details, see Practice Note: The meaning of qualifying interest in...

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Question of the week: Is quick succession relief (QSR) available where an individual A inherited assets (on which IHT was paid) from B’s estate less than five years ago and A subsequently made potentially exempt transfers (PETs) before their own death, when the failed PETs subsequently attracted IHT (ie on A’s death)? A’s estate passed to their spouse on their death and the only IHT liability arising on A's death is in relation to the failed PETs exceeding the available nil rate band.

This Q&A considers whether quick succession relief is available where A has inherited assets from B's estate and A has subsequently made potentially exempt transfers (PETs) before their own death, when the failed PETs subsequently attracted IHT.