Stand-out Q – deed of variation…

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FRI, 02 FEB 2018

Our Technical Hub provides access to a wide range of pension tax and trust technical resources. Every now and then we post tweets covering stand out questions from our technical content and our answers in case others might also find them helpful. As Twitter’s character restrictions only allow for the bare bones of the Q&A we link to the details here, too.

Question:

Client’s father has died and the family want to amend his will. Can they do so?

Answer:

Deeds of variation can be used to vary the terms of a will or the distribution of an estate following full or partial intestacy. For example, they can amend the beneficiary of individual assets or can insert trust provisions. They can often be used to reduce the inheritance tax liability on an estate, but not all deeds of variation are used for the purposes of reducing the IHT liability, and they will only be tax effective if they contain the appropriate statements confirming that they are intended to have effect for CGT and/or IHT purposes.

A deed of variation must be in writing and must be made within two years of the individual’s death to be effective for tax purposes. The deed must be executed by all parties affected by the variation, and it is not possible to amend or correct the deed subsequently. HMRC’s manual contains more information at pages IHTM35011 onwards.

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