The most flexible way in which you can draft a Will is to leave the whole of the estate on a trust for a wide class of beneficiaries. Those beneficiaries will typically include the deceased’s wife, children and grandchildren.

The advantages

  1. You can leave instructions to the Trustees asking them to distribute your estate according to the needs of the beneficiaries.
  • This can save a lot of time for you to regularly review and amend your Will during your lifetime as and when circumstances change.
  • Take the advantage of “uplift” in the base cost of the assets. This means that the beneficiaries will inherit the assets at its probate value for capital gains tax purposes.
  • There is no Inheritance tax charge when the assets leaving the trust within two years of death.

Nil rate bands (NRB)

NRB is the threshold, currently £325,000,below which some or all of the value of a gift, a death estate or assets held within a trust is subject to a zero rate of Inheritance Tax.

If an individual dies leaving some or all his/her nil band unused, a claim can be made for the unused proportion to be transferred to his/her spouse or civil partner.

Overall, the NRB can be worth £650,000 which means your estate would not be exposed to inheritance tax at death if your total estate value is less than this.

Residence Nil Rate Band (RNRB)

RNRB (currently £175,000) is available where you pass your main residence to children, grandchildren, great-grandchildren etc. via the Will, this is an addition to NRB.

Again, if an individual dies leaving some or all his/her RNRB unused, a claim can be made for the unused proportion to be transferred to his/her spouse or civil partner.

In total, the combine NRB and RNRB is worth £1 million per married couple. Contract us if you wish to discuss your Will or consider any Inheritance tax planning which can be beneficial.

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