18.4.1 Appointments under an IPDI

We have already outlined the advantages of an IPDI trust on the first death in that:

it gives a surviving spouse entitlement to income (an interest in possession) and therefore financial security. (However, use of such a trust would not facilitate the build-up of a debt on the survivor’s taxable estate by making loans because the capital of the trust would be in the IPDI beneficiary’s taxable estate); and

for IHT purposes, as the capital of the trust is treated as passing to the surviving spouse, he or she will benefit from the transferable nil rate band of the first to die.

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