A recently reported decision of the Special Tax Commissioners has highlighted the importance of obtaining good advice on Nil Rate Band Trust schemes.  Hart Reade have been aware of the potential difficulty that this case highlights for some time.  The problem centres around section 103 of The Finance Act 1986, which in essence disallows a deduction of a debt where the subject matter of the debt is property received from the deceased.  It is important for clients to give full details of gifts between spouses when preparing or reviewing their Wills and on implementation following the first death.

If clients are concerned that the circumstances may apply to them, they should be advised to contact their usual adviser as steps taken in their Wills can remove any potential problem.