A Nil Rate Band and Residence Nil Rate Band Discretionary Trust within the Will is a type of trust that can be established by a married couple to help reduce the inheritance tax (IHT) liability on their estate. It is also known as an NRB and RNRB Discretionary Trust. The Nil Rate Band (NRB) is the amount of an individual's estate that is exempt from IHT. As of the 2021/22 tax year, the NRB is £325,000. The Residence Nil Rate Band (RNRB) is an additional allowance that is available if a person's main residence is left to their direct descendants. As of the 2021/22 tax year, the RNRB is £175,000. A Nil Rate Band and Residence Nil Rate Band Discretionary Trust within the Will is established in the Will and is triggered upon the death of the first spouse. The Will directs that the NRB and RNRB be settled into a discretionary trust, with the surviving spouse and children as the potential beneficiaries. The trustees are given discretionary powers to distribute the assets within the trust. The main advantage of this type of trust is that it can help to reduce the IHT liability on the estate. By settling the NRB and RNRB into a discretionary trust, the assets are outside of the estate and therefore not subject to IHT. Additionally, the discretionary nature of the trust allows the trustees to distribute the assets in a tax-efficient manner.