Dealing with a claim: partially or unconstituted nil rate band trusts
The practice of creating nil rate band trusts either by Will or Instrument of Variation was standard Inheritance Tax planning for many years. In many cases, the only asset in the trust was a half share of the matrimonial home, and it is possible that the trust was never properly constituted. The taxpayer may advise that the trust was never set up, so that full spouse or civil partner exemption applied on the first death, leaving the full nil rate band available for transfer. Where this comes to light, you should treat the case in accordance with the facts in each particular case. Any case where there is doubt about the constitution of the trust should be considered with assistance from your technical support.