Q&As

Where the life tenant of an immediate post-death interest trust has died and the beneficiaries of both the trust and the deceased’s estate include charitable and non-charitable beneficiaries, how should the nil rate band be apportioned?

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Published on LexisPSL on 10/06/2019

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

  • Where the life tenant of an immediate post-death interest trust has died and the beneficiaries of both the trust and the deceased’s estate include charitable and non-charitable beneficiaries, how should the nil rate band be apportioned?

Where the life tenant of an immediate post-death interest trust has died and the beneficiaries of both the trust and the deceased’s estate include charitable and non-charitable beneficiaries, how should the nil rate band be apportioned?

The general method when calculating the tax on an estate is to omit the value of gifts to exempt beneficiaries to arrive at the taxable value of the estate. The legislative basis for this conclusion can be found in the following sections of the Inheritance Tax Act 1984 (IHTA 1984):

  1. inheritance tax is charged on the value transferred by a chargeable transfer (IHTA 1984, s 1)

  2. a chargeable transfer is a transfer of value which is made by an individual but is not….an exempt transfer (IHTA 1984, s 2)

  3. a transfer of value to a qualifying charity is an exempt

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