Gross estate = £950k
IHT reliefs available = 2 x RNRBs and one NRB = £675k
IHT = £950 - £675 = £275 x 40% = £110k
Net estate = £840k
There are three beneficiaries (all children of testatrix) and the net estate is to be split evenly. However, two of the three would prefer to take their share via trust rather than absolutely as they are already both well over the iHT threshold.
A hotchpotch clause has been recommended to gift the entire RNRBs to the child who takes absolutely, (child A) with restituitional gifts to be made to children B and C.
This means a gift of £350 for child A and 2 x £35k from child A to chidren B and C.
This is a better situation than at present but I’d prefer a clause that allowed the gift to child A to be able to compute the correct amount of RNRB to dispose of i.e. £280k (1/3 of £840 net estate) rather than £350K.
Would something along the lines of the following work?
To child A, I leave the requisite amount of RNRB to satisfy a legacy of one-third share of my net of IHT estate. With the remaining RNRB, if any, I leave 50% to grandchild A, 25% to grandchild C and 25% to grandchild D.