Deeds of Variation

Deeds of Variation pay for themselves, often, thousands of times over and are an effective tax saving tool. Deeds of Variation allow a person to pass some or all of an inheritance they have received on to someone else, and the recipient will be treated, for tax purposes, as it they inherited it directly from the deceased.

A Deed of Variation can be made following a Will being left or where a person dies without making a Will (intestacy).

Provided the variation is completed within two years of the date of death, the inheritance tax and capital gains tax position will be adjusted to foll0w the variation. 

The most common instance where a deed of variation is used is when a client inherits, for example, from their parents. If they do not need the money, and keeping it might make them more susceptible to paying care fees or inheritance tax on their death, they may prefer that it be given to their children. If they make the gift to their children directly they need to wait 7 years before that gift ceases to be liable for inheritance tax. By completing a Deed of Variation, the liability to inheritance tax ceases immediately and prevents the estate being taxed again on their death, helping to reduce or eliminate a capital gain.

Deeds of Variation can also be made to make gifts to charities or to equalise distributions between beneficiaries or to tidy up any uncertainties in a Will. An advantage to making gifts to charities is that such gifts do not attract inheritance tax. Also, if 10% of a deceased’s estate passes to charity the remainder of the estate benefits from a lower rate of inheritance tax. 

Our solicitors and lawyers are proficient in explaining and demonstrating the tax position faced and advising on the best holistic solution to save unnecessary tax being paid.

Please contact us today for a free no obligation discussion by calling our City of London or High Wycombe offices on the telephone numbers stated at the top of the page, or by email probate@curzongreen.co.uk