Are there any benefits in retaining a nil-rate band discretionary trust created by Will on the death of an individual as opposed to varying the Will and allowing the nil-rate band to transfer to the surviving spouse’s estate in due course?

It was common inheritance tax planning prior to the introduction of the transferable nil-rate band on 9 October 2007 to include within a Will a nil-rate band Discretionary trust usually including the surviving spouse, children, grandchildren and remoter issue within the class of beneficiaries. It is usually envisaged that the surviving spouse would be the principal beneficiary during their lifetime with the children and grandchildren being considered as secondary beneficiaries following the death of the surviving spouse. A nil-rate band discretionary trust is usually supported by an appropriate letter of wishes, which, while not binding on the Trustees is persuasive.

In cases where the Estate consists mainly of a property, usually the family home, the share of the first spouse to die in the property will usually comprise the trust fund. It is for this reason