Double counting IHT for houses in trust

WillowLeaf

If a husband places their house that they own 100% in to an IPDI trust via their will that allows their wife to live in it until no longer required, I understand from here that the wife is the beneficial owner and the value of the house is included in their estate for IHT purposes.

Does that mean that the house is counted twice for IHT purposes, once in the husband's estate and once in the wife's?

Keep_pedalling

No, anything going into an IPDI trust where the beneficiary is a spouse is exempt from IHT through spousal exemption, so it will not use up any of his NRB or RNRB.

If they own the house jointly (as suggested by the beginning of your first sentence) then only his share goes into trust not hers.

WillowLeaf

Thanks Keep_pedalling, my layman's assumption was that there was no spousal exemption as it wasn't left to the spouse (even though they had the beneficial ownership), so thanks for the clarification.

RAS

Transfers to a spouse do not incur an IHT liability

You need to be clear about how the house is held and who the remaindermen (beneficiaries on the survivor's death) are. This determines what exactly is left in the IPDI trust and the future IHT situation.

poseidon1

Assets ( of whatsoever nature) gifted into IPDI trusts by one spouse in favour of the other are unlimited IHT exempt spousal transfers.

The same IPDI trust in favour of anyone other than a spouse, are potentially liable to IHT .

UKTaxHelper

A discretionary trust as remainderman would lose the RNRB entirely.