Inheritance tax and a discretionary trust fund

The_Gardener_4

Mary (my Mother-in-law), has 6 children, all living. Her will asks that her estate is divided equally between her children. 5 children will receive their share of the estate, but the remaining share is to be placed in a discretionary will trust for the 6th child.
Her assets probably amount to about £300,000 putting her estate into the Inheritance Tax (IHT) bracket.
Please could anyone advise me on how IHT would be worked out, taking the discretionary trust fund into consideration?
Many thanks
The Gardener

brantwood150

As far as I'm aware, the fact that part of her estate will go into trust is irrelevant. It is still a bequest in the same way as the other bequests. IHT would be calculated in the same way as if she had left all of her estate to direct beneficiaries.

Cook_County

It would save tax if she made a chargeable transfer to the discretionary trust now (assuming she is not on her deathbed)...Is doing this a possibility?

slojo

The threshold for inheritance tax (IHT) this year is £275,000. IHT will be payable at 40% on the balance of £25,000 i.e. a total of £10,000. It is not relevant that some of the children will be receiving their inheritance outright and one in trust. She will only be able to save IHT by making a gift now if she survives the gift by seven years. She can however give away £3,000 per tax year to any recipient without needing to survive seven years. Hope this is helpful.

The_Gardener_4

Thank you for all the comments; it's all becoming a bit clearer now.
The Gardener