Q&As

If a settlor sets up two discretionary trusts several years apart for different groups of beneficiaries, does each trust have its own nil rate band for the purposes of the principal and exit charges under the relevant property regime (assuming there have been no other potentially exempt transfers or lifetime chargeable transfers)? Does it make any difference how many years after the first trust that the second trust is settled?

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Published on LexisPSL on 16/07/2020

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • If a settlor sets up two discretionary trusts several years apart for different groups of beneficiaries, does each trust have its own nil rate band for the purposes of the principal and exit charges under the relevant property regime (assuming there have been no other potentially exempt transfers or lifetime chargeable transfers)? Does it make any difference how many years after the first trust that the second trust is settled?

See Practice Note: Relevant property trusts—the principal (ten-year) charge within the Trusts—inheritance tax subtopic, which sets out the inheritance tax (IHT) rules applicable to discretionary trusts within the relevant property regime.

In particular, The amount of NRB to be deducted’ explains how the amount of basic nil rate band (NRB) available to be deducted is calculated. The Practice Note also discusses related settlements and same day additions.

See also Practice Note: Relevant property tr

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