The following Trusts and Inheritance Tax guidance note by Tolley in association with Emma Haley at Boodle Hatfield LLP provides comprehensive and up to date tax information covering:
Before October 2007, it was standard practice for married couples with estates large enough for inheritance tax to be an issue to include nil rate band discretionary trusts (NRBDTs) in their Wills. Otherwise, it was difficult for both spouses (which term is used here to include civil partners) to use up their nil rate bands (NRBs). This was because:
The NRBDT was a useful device which enabled the first spouse to die to use his nil rate band yet still provide for the survivor to benefit from the assets via a discretionary trust.
The arrangement works as follows:
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