Chevron pointing up icon

Unwinding unwanted Nil Rate Band Trusts

Solicitors in London

Maria is a great lawyer and gives a first class customer service

Property Client

Unwinding unwanted Nil Rate Band Trusts

Many existing Wills contain a nil rate band trust which became unnecessary for its main intended purpose with the introduction in October 2007 of the transferable nil rate band between the estates of spouses. Where both spouses are still alive a new Will can be made to revoke the nil rate band trust will but if this is not done for whatever reason, the nil rate band trust can still be unwound after the death of the first spouse.

The easiest way to do this and unwind the trust is for the trustees to appoint the trust assets in favour of the surviving spouse absolutely. This must be done within two years of death but not within the first three months following the death of the first spouse. Provided these time limits are complied with the appointment will be treated for IHT purposes as if the assets had simply been left to the surviving spouse outright, so the surviving spouse will have the benefit of the transferrable nil rate band. See Section 144 IHTA 1984. If the appointment is made within 3 months of the date of death it may be treated as a chargeable IHT event and there will be no reading back in to will.

Provided that the appointment is made during the period of administration the estate, which it normally would be, it will not give rise to a capital gains tax liability as the spouse will acquire as legatee.

The appointment out during the administration of the estate may be the preferred option but there are of course other uses for nil rate band discretionary trust wills, in addition to the preservation of the nil rate band of the first spouse, so this should not be done without full consideration of any other benefits preserving it might achieve.

 

Speak to a Lawyer

Latest Wills, Probate & Disputed Estates News


Osbornes Law Osbornes Law @osborneslawyers RT @jellymalin: I woke up with a sudden desire to start a book 📚 club in North London, featuring lots of cheese & wine. Would you guys wann… 4 weeks ago
Osbornes Law Osbornes Law @osborneslawyers RT @camdencyclists: Only six days left to say to Camden "KEEP TAVI PLACE MOTORS EASTBOUND" https://t.co/YkDDnKq9Ga https://t.co/UUO6DdDQpt 4 weeks ago
Osbornes Law Osbornes Law @osborneslawyers @osborneslawyers launching new advert @ #Hampstead tube very soon. Here is a clue as to the theme!! @HandHSocHeathhttps://t.co/mAccFfxYdW 4 weeks ago
Osbornes Law Osbornes Law @osborneslawyers @osborneslawyers very proud to be involved in such an important project. https://t.co/5xZyFmEvRB 4 weeks ago
Osbornes Law Osbornes Law @osborneslawyers Great night at the #BritishLegalAwards. Privilege for @osborneslawyers to be up for UK Law Firm of the Yr with thes… https://t.co/MV2j7TUs0c 7 weeks ago
Osbornes Law Osbornes Law @osborneslawyers RT @PriorSteph: ⁦@osborneslawyers⁩ ⁦@ClaireAndrews36⁩ ⁦@FreedmanMark⁩ ⁦@RobertAylott⁩ We are having a great time at Hilton Deansgate Manche… 7 weeks ago
Osbornes Law Osbornes Law @osborneslawyers Big night for @osborneslawyers with TWO award ceremonies. Family Law Firm of the Yr #FamilyLawAwards & Claimant PI… https://t.co/0HLg61m0Wy 7 weeks ago
Osbornes Law Osbornes Law @osborneslawyers Congrats to @FreedmanMark and @LisaPepperLaw @osborneslawyers who both feature in the @SpearsMagazine 500 2019 guid… https://t.co/ZL8d8yb05I 9 weeks ago
Osbornes Law Osbornes Law @osborneslawyers Very good article in today's @standardnews - @BenPosford1 demanding that the families of the Croydon Tram Crash get… https://t.co/a1b8M3j8Jt 10 weeks ago
Osbornes Law Osbornes Law @osborneslawyers Well said @BenPosford1. These are questions that should have been answered by now. @osborneslawyers https://t.co/0MUMWYWP16 10 weeks ago

Introducing Your Wills, Probate & Disputed Estates Legal Team

Osbornes has an experienced team of specialist wills-probate-disputed-estates lawyers to assist with your case / situation

arrow pointing up

Camden

Livery House, 9 Pratt Street, London NW1 0AE
Tel: 020 7485 8811 Fax: 020 7485 5660
DX Number 57053 Camden Town

Hampstead

28A Hampstead High Street, Hampstead, NW3 1QA
Tel: 020 7485 8811 Fax: 020 7485 5660

Contact a Lawyer

Enter your details below to receive a call from Osbornes:


Trustpilot

Speak To A Lawyer

Speak To A Lawyer

Speak

To a

Lawyer