ARTICLE · 02 SEPTEMBER 2008

Discretionary Will Trusts: Are They Still Useful?

Meade King

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Some people have concluded that discretionary will trusts no longer have a place in capital tax planning following the introduction last October of the transferable nil rate band provisions.

United KingdomTax

Richard Boulding

Some people have concluded that discretionary will trusts no longer have a place in capital tax planning following the introduction last October of the transferable nil rate band (NRB) provisions. Since last October any NRB allowance which is not used on the first death can be transferred to the surviving spouse's estate on their subsequent death.

HM Revenue & Customs (HMRC) are steadily reducing Inheritance Tax (IHT) planning opportunities making it essential for clients to maximise those reliefs and exemptions which are still available.

For business clients two of the most important IHT reliefs are Agricultural Property Relief (APR) and Business Property Relief (BPR). Provided land satisfies the definition of "agricultural property" and has been occupied for the purposes of agriculture for either two or seven years (depending upon who farms the land), the IHT relief which is then applicable is

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