Carried forward NRB and gifting

Wildparaplanner

Hi,

Perhaps I'm having brain fog, but I can't seem to find a definitive answer on this.

If a widow(er) has the full NRB carried over from their deceased spouse, were they to make a £650,000 gift (PET) to a child and then subsequently die 1 year later, does the carried over NRB get used up on the PET as well as the 2nd life's NRB or can it only be offset against the estate?

Same question for CLTs.

Thanks
Wild

les_cameron

When you revisit failed gifts on death you get to use all the available NRB so it includes the additional amount. Regardless of CLT or PET.

Wildparaplanner

Can you make more than the £325k to a discretionary trust without incurring the 20% IHT charge by using unused NRB from the deceased spouse or not possible?

benjaminfabi

@Wildparaplanner I always think of it in terms of everything being a gift (or transfer of value), with the estate being the last gift you make. So when I do the IHT calculation I set out the amounts chronologically and this will default to the full NRB available being offset against the oldest gifts first.

les_cameron

@Wildparaplanner said:
Can you make more than the £325k to a discretionary trust without incurring the 20% IHT charge by using unused NRB from the deceased spouse or not possible?

You cannot use the extra NRB on lifetime gifts only on death, so not possible.

benjaminfabi

@Wildparaplanner you don't get the transferable NRB until/unless the executors apply for it on death i.e. you aren't entitled to it until you die so you can't use it in your lifetime.

Wildparaplanner

@benjaminfabi said:
@Wildparaplanner you don't get the transferable NRB until/unless the executors apply for it on death i.e. you aren't entitled to it until you die so you can't use it in your lifetime.

Yes you're right, I missed that critical aspect of lifetime vs on death. Thanks