All beneficiaries were predeceased

A Deed of Variation

A Deed of Variation can impact the position of Inheritance Tax both positively and negatively depending on the terms.

Must be agreed

The Deed of Variation must be agreed to and signed by the affected parties.

Logged with HMRC

The Deed of Variation must be lodged with HMRC if it impacts the Inheritance Tax position

The Problem

We acted on behalf of an elderly client who was the sister of the deceased. As the Will was significantly out of date, all beneficiaries except one had predeceased, leaving only one beneficiary remaining.

This beneficiary was concerned that inheriting a sizable estate would put her children in a difficult position with regards to Inheritance Tax when she herself passed away.

The client wished to benefit wider family but was concerned about inheriting her sisters large estate and making gifts of significant financial value to those family members which would be liable to Inheritance Tax when she passed.

The Solution

We advised that we could re-distribute the estate prior to the client inheriting it. We prepared a Deed of Variation to effectively re-write the Will of the deceased to include charities and wider family.

The Outcome

The charitable gifts were exempt from inheritance tax. Gifts to wider family qualified for Inheritance Tax Relief under the Residence Nil Rate Band Allowance and the client beneficiary was able to benefit her wider family without her children suffering the Inheritance Tax implications when she passes.

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