Q&As

Can the remainderman of a life interest trust disclaim their interest? What are the IHT consequences of the remainderman disclaiming their interest on the death of the life tenant?

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Published on LexisPSL on 23/08/2017

The following Wills & Probate Q&A provides comprehensive and up to date legal information covering:

  • Can the remainderman of a life interest trust disclaim their interest? What are the IHT consequences of the remainderman disclaiming their interest on the death of the life tenant?
  • Use of life interest trusts
  • Brief summary of inheritance tax treatment of life interest trusts
  • Disclaimer by remainderman—general law consideration
  • Disclaimer by remainderman—inheritance tax (IHT) consequences

Can the remainderman of a life interest trust disclaim their interest? What are the IHT consequences of the remainderman disclaiming their interest on the death of the life tenant?

For the purposes of the Q&A, we have assumed the life interest trust was established by Will. We have also assumed that the remainderman has a vested interest, and that the interest is not contingent on the satisfaction of any condition. It will be important to check the precise terms of the trust as this may have a bearing on the disclaimer and tax treatment. This Q&A does not cover any tax consequences other than inheritance tax consequences.

Use of life interest trusts

The remainderman of a life interest trust is the term used to describe the beneficiary who receives the assets of a trust after the death of the life tenant. Life interest trusts are commonly created by Will, and are used to create and to protect specified rights. Commonly, a spouse who owns the family home may leave the property to the children, but will wish to ensure that the other spouse can continue to occupy the family home for the remainder of their life. Examples of where such trusts are established include second marriage cases, where the party introducing the asset into the relationship wants to preserve it to pass on to the children of

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