Deed of Variation

[stel]

Our mother has recently died and left her entire estate to our father to take advantage of the double IHT allowance. Her estate is in the region of £550,000.

As our father has adequate resources in his own right he is considering a deed of variation to pass some of our mother’s estate to myself and my sister.

Obviously he does not want to lose the double IHT allowance, but is there any way he can use a deed of variation to pass at least part of our mother’s to us without loss of the advantages of the double IHT allowance.

[pqtaxation]

.... is there any way he can use a deed of variation to pass at least part of our mother’s to us without loss of the advantages of the double IHT allowance?

Broadly no there is not, but obviously any such deed of variation (DoV) has to be tailored to the specific circumstances about which you give little information.

As you say, if your father executes a DoV to gift some of your mother’s estate to you that will diminish the proportion of transferable allowance unused by your mother’s estate that will be available to his estate on his death. If your father is very likely to live another 7 years then he could gift you part of Mum’s estate as a potentially exempt transfer (PET) [though not part of the house if this would be a gift with reservation of benefit] and his estate on his death would still benefit from a full transferable nil rate band from your mother.

By all means come back with more information on your father’s health, the composition of his and your mother’s estates and his need for income/capital and how that need will be met in his expected lifetime. Comments here may then give you some ideas for discussion with your father but he will need to take professional advice.