Estate and Inheritance Tax Planning Advice and Help

I’m Bik-ki Wong, Partner and Head of Wills Trusts and Probate and Private Wealth at Myerson Solicitors LLP.

I specialise in helping clients with their estate and inheritance tax planning.

Today I will be explaining what a Deed of Variation is and what it does.

What is a Deed of Variation (DOV)?
A Deed of Variation is a legal document that usually changes the distribution of an estate after death and this can apply to estates where there is a Will as well as those who have died intestate (without a Will). For IHT and CGT purposes, a DOV will allow the redirection to be treated as if the deceased has made the gift themselves.

Why make a Deed of Variation?
Deed of Variation as usually used to reduce IHT in the estate of the deceased for example, passing non-chargeable assets to chargeable beneficiaries or redirecting more to charity to reduce IHT rate from 40% to 36%. It can also be used to bypass the estate of the original beneficiary so that they do not have to receive their inheritance and then gift onto a third party which would be subject to a 7 year survivorship period before it falls out of their estate. When utilised at the right time, a DOV can save thousands in IHT.

What are the requirements?
The variation must be in writing and made by the original beneficiary giving up their entitlement within 2 years of the deceased’s death. The deed must clearly state what is being varied and contain a statement setting out whether the retrospective provisions for IHT and/or CGT should apply.

If you need help with your own estate planning, feel free to contact our Private Wealth team:

Telephone: 0161 9414000

E-mail: [email protected]

Websites: https://www.myerson.co.uk/wealth