This is included as an option in nearly all clients plans.

There is a loss of £1 for every £2 over £2million and so on an estate of £2,350,000 the whole RNRB would be lost resulting is an IHT bill of £70,000.

On the death of the first spouse it allows a separate IPDI to be set up to hold the Residential nil rate band (RNRB)of the first to die. This means if the 2nd spouse dies with an assets base of over £2million the retention of a RNRB would save £70,000 of Inheritance tax depending on the value of the surviving spouse estate of £2 million.  

There is also a 2nd type of IPDI

If either spouse has children from a previous marriage and so you want your assets split unevenly between your respective children you must be very clear in your instructions as to what happens if:

If either client dies first - what happens with his/her assets?

If either client dies second - what happens with his/her assets?

This is normally enacted by giving the surviving spouse use of all or some of the assets but not a right to the capital. The right to the capital is retained by the IPDI which lends income and capital to the surviving spouse at the discretion of the trustees and is repayable back to the IPDI on death of that surviving spouse. The capital is passed on second death to the persons children once the surviving spouse has died.

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