As part of our Estate planning structure which is set up for the majority of clients there is an option for an Immediate Post Death Interest Trust (IPDI)which allows us to “bank” the RNRB.

This is used if the surviving spouse’s estate is already over £2 million or likely to be over £2 million on their eventual death. As the RNRB is reduced by £2 for every £1 over £ £2 million on the death of a single/divorced person or widow/widower this can result in the loss of two RNRB (if the dead spouses RNRRB was transferred to the surviving spouse) thus reducing the allowances for IHT from £1 million to £650,000. This then results in additional tax payable of£140,000 (40 % of £350,000)

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