clouds, sky, blue, white, logo, text, willpack,

Survivorship Clauses and Commorientes

By | Inheritance Tax | No Comments

Survivorship clauses between spouses will often include provisions so that the survivorship period will not apply if they both die in circumstances where it is uncertain who survived the other, for example in a plane crash. The reasons for this inclusion is a very specific inheritance tax advantage where spouses die together, and it cannot be determined which of them died first. In succession law, it is impossible for two people to die at the same time. Instead, S184 Law of Property Act 1925 provides that where the order of deaths are uncertain, a younger person is presumed to have survived an elder person. This is known as the Commorientes rule. This presumption applies to gifts by Will and assets passing by survivorship under a Joint Tenancy. It does not apply to assets passing by intestacy. For the purposes of calculating inheritance tax however, it is possible for people to…

Read More
Discretionary Trusts, WillPack, House, Money, Table

Discretionary Trusts

By | Property, Trustees, Trusts | No Comments

The Discretionary Trust is a common Trust for a Testator to use for their children to ensure that they do not inherit directly from their estate. The reasons for this can vary, for example, protecting assets from potential divorce, drinking or gambling issues, or the testators may wish that their assets are distributed in a particular manner or at certain points in their children’s lives that are outside the capabilities of the Will itself. This type of trust is effective because the assets are held and managed by the Trustees to distribute to the beneficiaries at their own discretion, hence the name of the trust and just because a beneficiary is named under the trust does not mean that they are absolutely entitled to any assets – useful where the Trustees may have concerns over how the money may be used.  Where beneficiaries are named under the Trust; this can…

Read More

Residential Nil Rate Band – Qualifying Residential Interest

By | RNRB | No Comments

Residential Nil Rate Band – Qualifying Residential Interest The rules for the Residential Nil Rate Band (RNRB) introduce a variety of new terms that need defining. The first of these is a Qualifying Residential Interest. The new S8H Inheritance Tax Act 1984 defines a Qualifying Residential Interest (QRI) as an interest in a dwelling which has been the deceased’s residence at some time during his period of owning the property. This includes a property’s garden or grounds. Residence itself is not defined in the Act. In the majority of cases it will likely be clear whether a property is a person’s residence (as the majority of people will only own one property, their main residence). For when it is not, it is assumed that Capital Gain Tax case law will be relevant in this area. The property doesn’t have to be a main home and there is no minimum ownership…

Read More