IHT rnrb advice please

[marksam]

hi i’m requesting advice in relation to Property, of which there are two, inherited by direct descendants of the deceased; should i claim the rnrb on the property left to adult Son as second property was left to GD Who is 16 years old, would it be wise to put second property on trust? does it reduce inheritance tax or arise taxation when the trust ends?

[Pezza54]

Are you an executor of the will? Are you carrying out the IHT calculation?
Provided the deceased person resided in both properties at some time in their life, either property can be selected for rnrb
If one property is valued less than £175K and the other over £175k there is a tax benefit to choose the more valuable property/
Website www.lawsociety.org.uk contains a section on Trusts which explains the different types of Trust.
Check the will, it could say the property to be held in trust until GD reaches 21.. If not GD will be entitled to assets in the trust when she reaches 18.
The executor(s) select willing trustees (minimum 2) to administer the will. Solicitor sets up the trust. Trustees will be responsible for managing the property (rental income, maintenance, insurance, paying utilities etc) They are responsible for paying any tax on income to HMR and for investing net income. When GD decides to sell the property she may be liable for capital gains tax.

[Pezza54]

Forgot to ask if the deceased person lived in Scotland. Trust rules are not the same as uk. Unless the will states different, GD would be entitled to assets in the trust at 16.

[marksam]

hi there, thanks for your reply; the deceased domiciled in England and GD entitled at 18 .
I was meant to ask ; if GD property uses the available rnrb can the remaining value be held in Trust?

[Pezza54]

No. Assume the deceased person was divorced years ago. Total value of their estate is £1m including main residence house valued at £250k left to GD. No gifts in last 7 years.
Total nil rate band is £325k +175k = £500k. IHT is £1m -£500k =£ 500k@40% = £200k
The property is put in Trust until GD reaches 18
The same would apply to any money left to GD