Terms

Question 1

Abatement

Answer 1

If there is insufficient money in an Estate to pay all of the Legacies under a Will in full, each Legacy is reduced (normally proportionately) so that all Beneficiaries receive something. This reduction is referred to as Abatement.

Question 2

Absolute Interest

Answer 2

Where a Beneficiary is immediately and, without restriction, entitled to receive the benefit due.
See Contingent Interest.

Question 3

Accumulated Income

Answer 3

Income generated by a Trust Fund can be paid out to a Beneficiary immediately, kept to one side as a “stock pile” of undistributed income or the Trustees can decide to formally Accumulate it.
Accumulated income can be converted into capital. The Trustees will often do this if none of the Beneficiaries need the income and it is simpler for the Trustees to treat these amounts as capital along with the rest of the Trust Fund.
NB: If the Trustees “stock pile” income then it remains available to distribute to the Beneficiaries. However, it can’t be held as income indefinitely. After a certain period of time the Trustees must treat it as capital.

Question 4

Accumulation and Maintenance Trust (A&M)

Answer 4

A type of Trust that was abolished in April 2006 but which you will find reference to. A&M Trusts were often used by parents / grandparents to benefit minor children and were taxed more leniently than other types of Discretionary Trust.

Question 5

Ademption

Answer 5

If a specific item (e.g. a particular watch or painting) is left to someone by Will but when the Testator dies he no longer owns it, the clause in the Will cannot be given effect to and the gift has adeemed.

Question 6

Administration

Answer 6

The process of dealing with all matters involved with the winding up and distribution of a deceased person’s Estate.

Question 7

Administrator

Answer 7

A person appointed by court (via Non Contentious Probate Rules 1987) to Administer a person’s Estate. An Administrator (rather than Executor) is appointed when a person dies Intestate or where there is a Will, but the named Executor is not going to act.

Question 8

AEA 1925

Answer 8

Administration of Estates Act 1925.

Question 9

Affidavit of due execution

Answer 9

A written statement confirming that a Will was validly executed, and the person who signs the statement (usually the witnesses) formally swears as to the truth of its contents.

Question 10

Agent

Answer 10

For purposes of Trustee Act 2000. (See also Custodian and Nominee).
A person to whom Trustees have delegated decision making powers.
An Agent will essentially step into the shoes of the Trustees and make management decisions about the Trust assets. However, he can only act in relation to the assets, and within the limits of, what is delegated to him.
E.g. A solicitor Trustee decides that Trust money should be invested in stocks and shares. However, he does not have the expertise to decide which shares to buy, when and how many. He can therefore transfer funds to a specialist fund manager who will make these decisions on his behalf. When the Agent makes decisions about the shares he has full discretionary powers. However, he would have no powers in relation to other Trust assets over which he has not been appointed Agent.
The Trustee who appoints an Agent will still be under a duty to supervise the Agent and ensure that he is an appropriate person to act. E.g. while the choice of which shares to buy and sell rests with the Agent, if his actions result in a fall in value of fund, then the Trustee would need to consider whether a different fund manager needs to be appointed instead.

Question 11

Ancillary proceedings

Answer 11

Part of the divorce process which resolves any financial issues between the parties to the marriage.

Question 12

Appointment out of a Trust

Answer 12

Where trust property is either paid out absolutely to a beneficiary or resettled on new trusts.

Question 13

APR

Answer 13

Agricultural Property Relief.

Question 14

Attestation

Answer 14

The act of acknowledging that a document has been signed by the person whose name is on the signature line. Attestation only relates to the signing process and does not guarantee the content of the document.

Question 15

Attorney

Answer 15

Someone who a Donor legally appoints to manage their affairs on their behalf.

Question 16

Beneficiary

Answer 16

A wide term used to describe any person (or organisation) who can benefit under a Will or from a Trust.
Includes those with Absolute, Vested and Contingent Interests as well as those who have only a hope of benefiting (rather than fixed and identifiable rights).

Question 17

Bequest

Answer 17

General term used to mean a gift made by Will, but more often refers to a gift of personal possessions rather than real property.
See Legacy / Devise.

Question 18

Bereaved Minors Trust

Answer 18

A Trust created by Will or Intestacy, for the Testator’s minor children who must have an Absolute Interest in the Trust property when they reach 18 and which complies with s. 71A IHTA 1984.

Question 19

Bereaved Young Person’s Trust (also referred to as an “18-25 Trust”)

Answer 19

A Trust created by Will, for the Testator’s children who are under the age of 25 who must have an Absolute Interest in the Trust property by their 25th birthday and which complies with s. 71D IHTA 1984.
Can be used instead of a Bereaved Minor’s Trust when parents do not want their children to inherit at 18.

Question 20

Bona Vacantia

Answer 20

Translates as “ownerless goods” and refers to assets distributed in accordance with the Intestacy Rules which end up passing to the state because there are no family members to inherit.

Question 21

BPR

Answer 21

Business Property Relief.

Question 22

Certificate Provider

Answer 22

The Certificate Provider is someone who must ensure that the person who wishes to make the Lasting Power of Attorney is mentally capable of making it and that there is no pressure on them to make one.

Question 23

Chargeable Transfer

Answer 23

A transfer of value made by an individual which is chargeable to IHT. The value of the Chargeable Transfer is the actual amount / value transferred less any exemptions or reliefs that apply.
Chargeable Transfers include:
 Lifetime Chargeable Transfers (LCTs)
 Failed Potentially Exempt Transfers (PETs)
 The transfer of a person’s Estate which is
deemed to take place when they die.

Question 24

Chattels

Answer 24

Personal property such as household and personal goods, furniture, jewellery, antiques and works of art, but NOT items used for business purposes or held solely for investment purposes. See s. 55 (1)(x) AEA 1925.

Question 25

Clear Off

Answer 25

The process of showing that an individual is the right person to be appointed as the Administrator of an Estate. When applying to court to be appointed, the applicant must show that no one else has priority to act i.e. “clear off” other categories of relative who would also have a claim to act as Administrator.

Question 26

Codicil

Answer 26

A formal document that amends, rather than replaces, a Will. Codicils are used where the Testator wants to make a small number of minor changes to his Will. When the Testator dies the instructions in his original Will, as amended by any Codicils, are put into effect.

Question 27

Commorientes

Answer 27

The rule that applies where two or more people die in circumstances where the exact order of death is uncertain, e.g. in a road accident or plane crash. Where this happens there is a presumption that the eldest died first and the youngest last.

Question 28

Conditional Interest

Answer 28

See Contingent Interest.

Question 29

Contingent Interest

Answer 29

An Interest under a Will or Trust where a specific event has to happen before the Beneficiary becomes entitled. E.g. Helen is left £10,000 under her uncle’s Will but the money can only be paid to her once she reaches 21. If her uncle dies when she is 18, Helen is not entitled to the money absolutely (she hasn’t complied with the condition attached to the gift). On her 21st birthday she has complied with the contingency, her interest Vests and the £10,000 must be paid to her immediately. Before Helen complies with the condition her interest in the gift is described as ‘contingent’.

Question 30

Corrective Account

Answer 30

An Inland Revenue account (Form C4) which notifies HMRC of:  assets that were not included in the IHT 400/205, or  any adjustment to valuations previously submitted.

Question 31

CTO

Answer 31

Capital Taxes Office. The division of HMRC that deals with IHT.

Question 32

Cumulative Total

Answer 32

Total of all the Chargeable Transfers made in the seven years prior to the current Chargeable Transfer.

Question 33

Custodian

Answer 33

In the context of Trustee Act 2000. (See also Agent and Nominee.) Someone who undertakes the safe custody of some or all of the Trust assets, or of any documents or records relating to the assets. A Custodian does not exercise management powers over these assets. E.g. if the trust held some antique furniture the Trustees may decide that it would be best looked after if it were placed in a specialist museum, where it could be safeguarded and maintained.

Question 34

Cy-près doctrine

Answer 34

When a gift to a charitable organisation is made by Will and the charity named either no longer exists or no longer conducts the activity for which the gift is made, then the gift would ordinarily fail. However, the cy-près doctrine allows the PRs to make the gift to an organisation which comes closest to fulfilling the purpose of the original gift.

Question 35

Death Rate

Answer 35

0% and 40% - the rate at which IHT is charged on the Taxable Estate. IHT may be charged at 0% and 36% if the estate qualifies for a reduced rate as a result of charitable donation.

Question 36

Deed of Variation

Answer 36

Deed by which the Beneficiaries of a Will or Intestacy can change / re-direct their inheritance. They allow family members to effectively “re-write” the deceased’s Will, often for tax planning purposes.

Question 37

Devise

Answer 37

A gift under a Will - is normally used in relation to gifts of land.

Question 38

Discretionary Trust

Answer 38

A Trust where none of the Beneficiaries have a Life Interest. Instead, Trustees have discretion to decide which of a number of Beneficiaries should receive capital or income from the trust, when and how much. No Beneficiary is entitled to anything; rather each has a hope of receiving benefit and relies on the Trustees exercising discretion in his favour. Discretionary Trusts are taxed under the Relevant Property Regime and can be referred to as Relevant Property Trusts.

Question 39

Distribution Estate

Answer 39

All the assets that a person owns when they die which are distributed in accordance with their Will or the Intestacy Rules. Also referred to as the Succession Estate. The gross Distribution Estate is the total value of all these assets. The net Distribution Estate is the gross value less the debts/liabilities.

Question 40

Domicile

Answer 40

The place where a person has their “fixed and permanent home” – where they live or intend to return to. There are three types: Domicile of Choice (where a person has moved to a new country with the intention of settling there permanently). Domicile of Dependency (while under the age of 16 a child has the same Domicile as the person on whom they are dependent). Domicile of Origin: The Domicile acquired at birth (usually that of a person’s father). It need not be the country in which a person is born. A person’s domicile affects their liability to inheritance tax and also determines the common law system that applies for succession matters. Do not confuse with Residence.

Question 41

Donatio Mortis Causa (DMC)

Answer 41

A gift made in contemplation of and conditional upon death. Can be referred to as a “death bed” gift. E.g. Dennis made a Will leaving his car to his daughter Helen. Close to dying he changes his mind and tells his nephew Joe that when he dies he wants Joe not Helen to have the car. If Joe can prove the DMC, it will take precedence over the contradictory clause in the Will and he will inherit the car.

Question 42

Donor

Answer 42

Someone who creates a Lasting Power of Attorney

Question 43

Enduring Power of Attorney (EPA)

Answer 43

A valid Enduring Power of Attorney legally authorises Attorneys to act on the Donor’s behalf in financial matters. The authority can continue even after the Donor loses mental capacity. Since 1 October 2007, it is no longer possible to create an Enduring Power of Attorney.

Question 44

Estate

Answer 44

A wide term used to describe everything that a person owns or is entitled to. See Distribution Estate and Taxable Estate.

Question 45

Estate Accounts

Answer 45

Accounts recording the financial transactions during the Administration period. The accounts will include a list of all the deceased’s assets and their value, details of any income received and gains realised, any tax paid and the payment of Legacies to Beneficiaries.

Question 46

Estate Rate

Answer 46

The average rate of IHT paid on the Taxable Estate. Usually, because part of a Taxable Estate falls within the NRB and only the extra is taxed at 40% - the overall rate of IHT paid on the whole Estate will be less than 40%.

Question 47

Excepted Estate

Answer 47

An Estate where an IHT 205, rather than IHT 400, can be returned to HMRC. In summary, the main aspects of an Excepted Estate are where the gross taxable value:  is less than the NRB, so no IHT is payable – a “low value estate”  is less than £1M and no IHT is payable because spouse/civil partner/charity exemption applies – an “exempt estate”  of UK assets held by a non-UK Domiciled person are not more than £150,000 – a "foreign domiciliary estate”. This is not an exhaustive list. See Inland Revenue Account.

Question 48

Excluded Property

Answer 48

Property which is outside the charge to IHT.

Question 49

Executor

Answer 49

Person appointed by Will to carry out the instructions in the Will and administer the deceased’s Estate. Executrix is the feminine form.

Question 50

Executors’ Year

Answer 50

The 12 month period following death. Executors are usually expected to have dealt with the Administration of the Estate within this period.

Question 51

Exempt Beneficiary

Answer 51

There is no IHT charge on transfers of value to Exempt Beneficiaries. Exempt Beneficiaries include a person’s spouse or civil partner and registered charities.

Question 52

Exit Charge

Answer 52

An IHT charge that arises when property leaves a Discretionary / Relevant Property Trust.

Question 53

Failed PET

Answer 53

A PET where the person making the gift has died within seven years of making it. Often referred to as the ‘seven year rule’.

Question 54

General Legacy

Answer 54

A gift in a will of property which is not distinguished from property of a similar type. E.g.1 ‘I GIVE to my cousin John Taylor of [address] 100ordinary shares in Tesco Plc’. If the shares are not owned by the Testator when he dies then the PRs would have to buy them. (Compare with Specific Legacy below.) Below is an example of a Pecuniary General Legacy. E.g.2 ‘I GIVE to my cousin John Taylor of [address] one thousand pounds £1,000.’

Question 55

Gift with Reservation of Benefit (GROB)

Answer 55

If a person gives away an asset (e.g. transfers legal title in their house to a family member) but continues to benefit from that asset after making the gift (e.g. lives in the house without paying rent) they have “reserved benefit” in that asset and made a GROB.

Question 56

Grant

Answer 56

See Grant of Representation.

Question 57

Grant of Letters of Administration

Answer 57

The Grant of Representation given to the Administrators of an Estate when a person dies Intestate.

Question 58

Grant of Letters of Administration with Will annexed

Answer 58

The Grant of Representation given to the Administrators of an Estate where a person dies having made a Will, but the named Executors (if any) are not acting.

Question 59

Grant of Probate

Answer 59

The Grant of Representation given to the Executors of a Will.

Question 60

Grant of Representation

Answer 60

A court document which confirms that the PRs named on it have authority to deal with the deceased’s assets, and can, therefore, proceed with the Administration of the Estate. Often just referred to as the “grant”. It is essential to obtain the grant as soon as possible because generally institutions holding the deceased’s assets require proof of it being issued before they will accept instructions from the PRs or their solicitors. The main types of grants are a Grant of Probate, a Grant of Letters of Administration and a Grant of Letters of Administration with Will Annexed.

Question 61

Guardian

Answer 61

Person with legal responsibility for a minor.

Question 62

Health and Welfare LPA

Answer 62

This relates to the Donor’s health and welfare. It can allow Attorneys to, for example, take decisions regarding the Donor’s medical treatment, where they live and regarding the Donor’s daily care routine.

Question 63

HMRC

Answer 63

Her Majesty’s Revenue & Customs.

Question 64

HNW

Answer 64

Abbreviation for “High Net Worth”. HNW clients usually means those with (liquid) net assets of £1-2M +.

Question 65

I(PFD)A 1975

Answer 65

Inheritance (Provision for Family and Dependants) Act 1975.

Question 66

IHT

Answer 66

Inheritance Tax. | A tax that is charged on the value transferred by a Chargeable Transfer.

Question 67

IHT421

Answer 67

A form sent by the PRs to HMRC. HMRC receipt and return it to confirm that the IHT due (based on information in the IHT 400) has been paid. The PRs need to send the receipted IHT421 to the Probate Registry before a Grant will be issued.

Question 68

IHT 400 / 205

Answer 68

See Inland Revenue Account.

Question 69

IHTA 1984

Answer 69

Inheritance Tax Act 1984.

Question 70

Illegitimate

Answer 70

A child born to unmarried parents. See Legitimated.

Question 71

Immediate Post Death Interest (IPDI)

Answer 71

If a person’s Will contains clauses which set up a Life Interest Trust, when they die (on or after 22 March 2006) the Life Tenant becomes immediately entitled to benefit from the deceased’s Will Trust (IHTA 1984 s. 49A) and, therefore, the Life Interest is called an Immediate Post Death Interest. IPDI are distinguished from other kinds of Life Interest (e.g. those in Inter Vivos Settlements) because different tax rules apply.

Question 72

Inland Revenue Account

Answer 72

The Form IHT 400 or IHT 205 which is submitted by the PRs to HMRC and gives details about all the deceased’s assets and any IHT due. The IHT 205 is shorter than IHT 400 and is used for Excepted Estates. The IHT 400 is longer, more complicated and is used for all other estates.

Question 73

Instalment Option

Answer 73

The ability to pay IHT over a 10 year period via annual instalments rather than in one lump sum. This option is only available for the IHT on particular assets (which include land, buildings and business property).

Question 74

Inter Vivos

Answer 74

During lifetime.

Question 75

Inter Vivos Settlements

Answer 75

Trusts set up during the Settlor’s lifetime (rather than by his Will).

Question 76

Interest

Answer 76

Any legal right (of ownership or use) over an asset.

Question 77

Interest in Possession (IIP)

Answer 77

See Life Interest.

Question 78

Interest in Possession Trust

Answer 78

See Life Interest Trust.

Question 79

Interest in Reversion

Answer 79

See Remainder Interest.

Question 80

Intestacy Rules

Answer 80

The statutory provisions that determine how a person’s estate is distributed if they die Intestate as set out in AEA 1925.

Question 81

Intestate

Answer 81

Dying without having made valid Will that covers all of your Estate. The Intestacy Rules will determine who inherits the Estate. See Partially Intestate.

Question 82

Issue

Answer 82

Children, grandchildren, great-grandchildren and so- on. Not just children.

Question 83

Lasting Power of Attorney (LPA)

Answer 83

Since 1 October 2007, Donors can create Lasting Powers of Attorney. There are two types:- 1. Property and Financial Affairs Lasting Powers of Attorney; and 2. Health and Welfare Lasting Powers of Attorney.

Question 84

Legacy

Answer 84

A general term used to describe any gift made by Will. However, it is used more to refer to gifts of property or money rather than land. See Bequest / Devise.

Question 85

Legitimated

Answer 85

When the parents of an illegitimate child subsequently marry the child is officially recognised by law as being “of the marriage” and becomes Legitimated.

Question 86

Letter of Wishes

Answer 86

A letter drafted by the Settlor of a (usually Discretionary/ Relevant Property) Trust and addressed to the Trustees. It describes the way in which the Settlor wants the Trustees to manage the Trust Fund. So, if a Settlor wants the Trustees to give priority to the needs of a particular Beneficiary, or does not want the Trustees to invest in certain types of shares, he can set this out in his Letter of Wishes. These letters are not legally binding, but there is a strong moral obligation for Trustees to follow them.

Question 87

Life Interest

Answer 87

A type of interest a Beneficiary can have in a Trust. The Beneficiary has a right to all of the income generated by the Trust Fund and/or use of the trust assets. For example, if the Trust Fund is a share portfolio then the Life Tenant of the Trust will be entitled to all the dividends that are paid in relation to those shares. If the Trust also holds property, then the Life Tenant will usually be entitled to live in that property. Also called an Interest in Possession.

Question 88

Life Interest Trust

Answer 88

A Trust in which a Beneficiary has a Life Interest. Life Interest Trusts are taxed differently depending on when they were created and whether they were set up during the Settlor’s life or by Will. Also called an Interest in Possession Trust.

Question 89

Life Tenant

Answer 89

A person who has a Life Interest in a Trust. | NB: The word Tenant in this context does not relate to property law.

Question 90

Lifetime Chargeable Transfer (LCT)

Answer 90

A gift into a Trust made by a person during their lifetime. | Covers the creation of a new trust and the addition of funds to an existing Trust.

Question 91

Lifetime Rate

Answer 91

0%/20% - the rate of IHT charged on LCTs.

Question 92

MCA

Answer 92

Mental Capacity Act 2005.

Question 93

Mortgage Protection Policy

Answer 93

A mortgage protection policy is an agreement to pay premiums to an insurance company, who will repay the amount the owner of the policy owes on the mortgage if the owner is unable to pay it e.g. if they die.

Question 94

Nil Rate Band (NRB)

Answer 94

The amount that can be transferred without any IHT being due. The NRB is taxed at 0% and is £325,000 for the current tax year. E.g: If the value of Tim’s gross Taxable Estate is £325,000 then no IHT is due. All of it falls within the NRB and is taxed at 0% (provided Tim had made no Chargeable Transfers in the seven years prior to his death). If the value of his gross Taxable Estate is £325,001, the first £325,000 is taxed at 0%, and the amount above the NRB (£1) is taxed at 40% (the Death Rate). So in this case, HRMC will be entitled to 40p IHT.

Question 95

Nominee

Answer 95

For purposes of Trustee Act 2000. (See also Agent and Custodian). A person appointed by Trustees to hold trust property in his/her/their name. This may be done for administrative reasons to eliminate the need to transfer Trust property into new names every time a Trustee is either appointed or retires from the Trust.

Question 96

Notified persons

Answer 96

Someone who the Donor chooses to be notified of an application to register the Lasting Power of Attorney.

Question 97

Oath for Administrators

Answer 97

The document sent to the Probate Registry which is sworn by the Administrators and sets out their entitlement to act.

Question 98

Oath for Administrators with Will annexed

Answer 98

The document sent to the Probate Registry which is sworn by the Administrators and sets out their entitlement to act.

Question 99

Oath for Executors

Answer 99

The document sent to the Probate Registry which is sworn by the Executors and sets out their entitlement to act.

Question 100

Official Copies

Answer 100

When applying for the Grant of Representation the PRs should ask the Probate Registry to provide the original grant and a number of copies. The copies will be embossed with a court stamp and are called “Official Copies”. The PRs are entitled to produce one of the Official Copies (rather than the original grant) when proving their entitlement to act.

Question 101

OPG

Answer 101

Office of the Public Guardian.

Question 102

Partially Intestate

Answer 102

Dying having made a valid Will that does not deal with all of the assets in the Estate. The Will determines what happens to the assets it does cover, and the Intestacy Rules apply to any assets which it does not.

Question 103

PC (WPEP)

Answer 103

Private Client (Wills Probate and Estate Planning) LPC elective.

Question 104

Pecuniary Legacy

Answer 104

Gift of a sum of money under a Will.

Question 105

Periodic Charge

Answer 105

IHT charge that occurs on each 10 year anniversary of a Discretionary / Relevant Property Trust.

Question 106

Perpetuity Period

Answer 106

The length of time a Trust can exist. The current perpetuity period is 125 years under the Perpetuities and Accumulations Act 2009. At the end of the Perpetuity Period the Trust property must be distributed to the Beneficiaries.

Question 107

Personal Representative (PR)

Answer 107

A person responsible for Administering an Estate. A generic term which covers both Executors and Administrators.

Question 108

PET

Answer 108

See Potentially Exempt Transfer.

Question 109

PET trap

Answer 109

In some circumstances a transfer made more than seven years ago can still impact on the amount of IHT due – this is referred to as the “PET trap”. Potentially Exempt Transfer (PET) – A gift by one person during their lifetime to another person (e.g. if a parent gives their child £10,000 towards a deposit for a house). PETs are commonly one-off or irregular gifts, although it is possible for repeat gifts to also be PETs.

Question 110

Precatory Trust

Answer 110

Where a Testator gives assets to a Beneficiary and expresses a wish that the Beneficiary will pass these on in accordance with the Testator’s wishes. This is a “false” trust – there is no legal trust, merely a hope that that the Beneficiary will comply with the wishes.

Question 111

Probate Registry

Answer 111

The Probate Service forms part of the Family Division of the High Court and deals with ‘non-contentious’ Probate business and issues Grants of Representation. The Probate Service is made up of the Principal Registry in London and 11 District Probate Registries.

Question 112

Probate Value

Answer 112

The value attributed to assets listed in the IHT 400 / 205. | See Inland Revenue Account.

Question 113

Property and Financial Affairs LPA

Answer 113

This relates to the Donor’s property and financial affairs. It can allow Attorneys to, for example, sell property, manage bank accounts, pay bills and claim pensions and benefits.

Question 114

Proportionate Charge

Answer 114

See Periodic Charge.

Question 115

Rate Applicable to Trusts (RAT)

Answer 115

The rate at which the Trustees of Discretionary / Relevant Property Trusts pay tax on Trust income.

Question 116

Related Property

Answer 116

Assets owned by spouses/civil partners which are worth more together than the total of the items when valued separately. E.g. Two vases that cost £100 each but together are worth £250, or if Andrew owns a 53% shareholding in a company and gives 5% to his wife Elaine – as a controlling interest the 53% could be worth more than the combined value of the 48% plus the 5%, if valued separately.

Question 117

Relevant Property Trust

Answer 117

Trusts created during the settlor’s lifetime after 22 March 2006 (except Disabled Persons Trusts) and some, but not all, Will Trusts created after 22 March 2006. Relevant Property Trusts are all subject to the tax rules that apply to Discretionary Trusts.

Question 118

Remainder Beneficiary

Answer 118

A Beneficiary who has a Remainder Interest.

Question 119

Remainder Interest

Answer 119

The right to an interest in a Trust at a future date. E.g: When a Settlor creates a Life Interest Trust he will name the Life Tenant (who is entitled to Trust income during his lifetime) and will also set out who should be entitled to the Trust assets when the Life Tenant dies. The people with a right to benefit only after the Life Tenant dies have a Remainder Interest, i.e. their interest is in the Trust assets which are left (‘remain’) at a point in the future. Also known as a Reversionary Interest.

Question 120

Remainderman

Answer 120

See Remainder Beneficiary.

Question 121

Renounce Probate

Answer 121

Where an Executor makes an official declaration that he is not going to be involved in the Administration of the Estate.

Question 122

Residence

Answer 122

There is a statutory residence test (SRT). The SRT determines whether a taxpayer is resident in the UK for income tax and capital gains tax purposes. Long term residence in the UK can result in a person being Domiciled in the UK.

Question 123

Residence Nil Rate Band (RNRB)

Answer 123

An amount of a Chargeable Transfer of value on death on which inheritance tax is charged at 0% (that is, on which there is no IHT to pay). It can be claimed where the deceased dies on or after 6 April 2017 and disposed of his interest in a residence to a lineal descendant (for example, a child or grandchild).

Question 124

Residuary Beneficiary

Answer 124

A person entitled to receive the whole or part of the Residuary Estate. See Residuary Estate.

Question 125

Residuary Estate

Answer 125

The part of the Estate which is left after all debts, expenses and Legacies have been paid. Also known as the Residue.

Question 126

Residuary Gift/Legacy

Answer 126

A gift of the whole or part of the Residuary Estate.

Question 127

Residue

Answer 127

See Residuary Estate.

Question 128

Reversionary Interest

Answer 128

See Remainder Interest.

Question 129

Revoke

Answer 129

Cancel.

Question 130

Settled Property

Answer 130

Any assets held in Trust.

Question 131

Settlement

Answer 131

This word is used interchangeably with Trust. However, Trusts set up during a Settlor’s lifetime tend to be referred to as Settlements to distinguish them from Trusts set up by Will.

Question 132

Settlor

Answer 132

A person who sets up a Trust (either during their lifetime or by their Will).

Question 133

Specific Legacy

Answer 133

Gift under a Will of a particular item which was owned by the deceased at the time of death and is distinguished from other property of a similar type owned by the deceased. If the Testator does not own the particular item when he dies then the gift fails. E.g. ‘I GIVE to my cousin John Taylor of [address] my shares in Tesco plc’. See also General Legacy to compare/contrast.

Question 134

Standing Search

Answer 134

A search run by the Probate Registry of all the grants that have been issued in the 12 months prior to the application (to make the search) and six months after.

Question 135

Statutory Legacy

Answer 135

The Legacy payable to a surviving spouse/civil partner under the Intestacy Rules. Currently £250,000 where issue of the deceased survive.

Question 136

Statutory Nominations

Answer 136

Assets (which include deposits with Friendly Societies and National Savings accounts) that can be transferred on death directly to a chosen Beneficiary by nomination rather than by Will or the Intestacy Rules.

Question 137

Statutory Trust

Answer 137

A Trust created by statute. In the context of Intestacy, Statutory Trusts are temporary in nature and exist for the benefit of identified Beneficiaries until they reach 18 (or marry earlier).

Question 138

Succession Estate

Answer 138

See Distribution Estate.

Question 139

Sui Juris

Answer 139

One of full legal capacity.

Question 140

Survivorship

Answer 140

The rule of law which states that on the death of a joint tenant the deceased's share of the joint property passes automatically to the surviving joint tenant(s). The property cannot be passed to anyone else under a Will or Intestacy.