Readers’ forum: Could executors claim residence nil-rate band?

Residence owned by trust

A’s main residence was transferred to a discretionary trust. The potential beneficiaries are A’s two elderly children. It was assumed A will not pay IHT on their death as the property is in the trust. This is not the case as it will fall under the gift with reservation of benefit rules as A is still staying in the property without paying market rent.

When calculating IHT on death can the executors claim the residence nil rate band on A’s residence even though the main residence is owned by the trust?

Query 20 083 – Locust.

Residence band(s) will not be available on A’s death.

In 2007 George Osborne then shadow chancellor said that the Conservatives would make the IHT nil-rate band (NRB) £1m and that is popularly supposed to have deterred Gordon Brown from calling an election that autumn. The Labour government...