Q&As

Would the residence nil rate band be available where an individual’s Will contains a nil rate band discretionary trust and a gift of the residuary estate to their children and where there is a qualifying residential property interest within the estate as well as cash exceeding the basic nil rate band threshold?

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Published by a UUÂãÁÄÖ±²¥ Private Client expert
Published on: 09 August 2019
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For general information on the residence nil rate band (RNRB), see Practice Note: IHT—residence nil rate band.

The RNRB is available to be set against a deceased individual’s whole estate up to the value of a qualifying residential property interest (QRI) passing to qualifying beneficiaries. The RNRB is only available where a QRI is ‘closely inherited’ on the deceased’s death, meaning that it passes to defined lineal descendants.

The availability of the RNRB will depend on the precise wording in the Will as this will affect the calculation of the amount passing into the nil rate band discretionary trust (NRBDT), including whether or not there is a transferable nil rate band (NRB) being claimed which might increase the amount passing into the NRBDT. It will also depend on whether

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Discretionary trust definition
What does Discretionary trust mean?

A trust in which the trustees have power to select the beneficiaries to benefit from the trust.

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