In the clear?

For complex but good reasons we recently advised on the creation of a new discretionary trust by a client. A very significant parcel of land was transferred to it.

The nil-rate band has been used elsewhere for another disposition so there is a lifetime inheritance tax charge on this particular transfer.

The land will no doubt eventually be sold by the trustees but at the moment there is no cash in the trust to pay the lifetime charge to avoid grossing up.

My question is simple. Is it safe for the settlor to lend the trustees the first one or two instalments of the tax and can it be done interest free?
After those instalments it is likely that the trustees would be able to settle the rest of the liabilities themselves.

We have warned that in view of the potentially very large sums involved in this...