Key points
- After the transferable NRB was introduced many testators with nil-rate band discretionary trusts in their wills decided to leave everything to the surviving spouse on the first death.
- If no other advantages exist winding up the nil-rate band discretionary trust may be a suitable option.
- There are various reasons why it might be beneficial to retain the trust.
- If retaining the trust it will be necessary to register with HMRC’s trust registration service.
- Dealing with a couple who have more than two nil-rate bands because of previous marriages.
Since the introduction of the transferable nil-rate band in 2007 nil-rate band discretionary trusts (NRBDTs) have become less popular. However they can be advantageous for spouses in some circumstances and many wills still contain them. All references in this article to spouses also include civil partners.
Background
Before October 2007 the purpose...