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Flexible will trusts for IHT planning

19 April 2017
Issue: 4595 / Categories: Comment & Analysis
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Flexible friends

KEY POINTS

  • A full discretionary trust provides flexibility and scope to re-writing the will under IHTA 1984 s 144.
  • Assets that qualify for business property relief can be recycled.
  • Consider preserving all available nil rate bands across several generations.
  • Case studies illustrate vital capital tax planning elements.
  • The transferable nil rate band is eroded in larger estates.

It is almost ten years since I first wrote on the potential importance that discretionary will trusts could play in estate planning despite the tax legislation that introduced the transferable nil rate band (TNRB) for inheritance tax purposes from October 2007. The concept of that legislation is now widely known and simple – the right of married couples (or civil partners) to claim a combined inheritance tax exemption of £650...

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