The tax-efficient Will – Nil-rate band legacies and exempt beneficiaries

It is possible to draft a Will in such a way that a nil-rate band legacy is left on discretionary trusts, while the balance of the estate is left to a beneficiary who is exempt from IHT. Before the enhanced nil-rate band became available in 2008, this was a common arrangement, with the testator leaving a nil-rate band legacy on discretionary trusts while the surviving spouse would be entitled to a life interest in the remainder of the estate. The surviving spouse would also be a member of the class of possible beneficiaries of the nil-rate band trust.