Time to mention the blogs IHT Solutions and Law and Death and Taxes who both post about the death of the nil-rate band discretionary trust.
You could certainly call the government politically cynical but for once, one can be magnanimous and simply accept that the government have listened to the voices of “middle Britain”. … In effect, the government has now made legal by statutory powers that which has until now been achieved by utilising the nil-rate band discretionary loan trust Will. As such, this form of Will in a stroke has effectively been consigned to the annals of legal history.
Law and Death and Taxes has a detailed post with the technical detail and the following comment:
This is an elegant solution to what was a real problem for couples: how to pass down the matrimonial home to children without an inheritance tax charge or the creation of complex trust arrangements that weren’t really understood. Contrary to what some commentators are saying, it does not raise the nil-rate threshold.
Seems to me that the government has also deftly kept to its principles. While the left argue that paying death duties is vital for social mobility and opportunity and the Chancellor’s wheeze will now relieve many in middle Britain from those taxes, its benefit is largely in favour of those who did not appreciate the need for, or could not afford, the IHT planning common amongst the ABC1s.
It seems to me that the government has probably had this solution in the cupboard for some time, waiting for a good opportunity (such as before an election) to bring it out. To that extent it is political but, apart from that, it is a solution to an actual problem, rather than an attempt to get rid of inheritance tax without actually doing so.
Leigh Sagar