For anyone who did the AF1 exam yesterday, what was the answer to the deed of variation re-directing the inheritance into a discretionary trust? Asked what the income tax and IHT impact was?


  • Hello, I think it was to do with the residential property and RNRB, if the property passed into trust then it doesn't pass to a direct descendant and the RNRB can't be used, but if the trust property passes to the grandchildren within 2 years then the RNRB can be claimed back. I put that there would be no IHT effect on the daughter as the DoV made it as though she never held the property, but in hindsight it could have been asking for us to say that it will potentially save IHT being paid twice (on mother's death then daughters)
    The income tax question threw me because I couldn't think of any reason why that would change, I've not thought much about it since though
    Good luck for your results 🤞
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