Deed of variation

[maths]

If a person dies intestate (ie without a will) a DoV can still be utilised to redirect an inheritance.

[dedalus]

Maths,

Sorry to complicate things again but I wanted to know what would happen in this scenario:

Person A lives in the UK and as of 2011 is non dom or dom unclear for example (ie. no long term plan to live here until death for example).

Person A receives inheritance (considerable) from relative B abroad who is non dom (never ever been to UK).

Person A ends up living here 20m years and dies here. HMRC could possibly argue that this person is uk domiciled at death.

Would a DOV made by person A to the benefit of C be still valid if at the time of making the DOV said person is not UK domiciled or with domicile position not defined with HMRC one way or the other. The risk here is that eventually person A becomes domiciled in the UK and estate inherited by person C would then be liable to high IHT.

I read that HMRC keep their cards closer to their chest in relation to the dom issue so I was wondering if a DOV is a valid document regardless of the domicile of the person making it (in this case A for the benefit of C).

[pqtaxation]

Person A ends up living here 20 years and dies here. HMRC could possibly argue that this person is UK domiciled at death.

Would a DOV made by person A to the benefit of C be still valid if at the time of making the DOV said person is not UK domiciled or with domicile position not defined with HMRC one way or the other. The risk here is that eventually person A becomes domiciled in the UK and estate inherited by person C would then be liable to high IHT.

A DoV that meets the requirements of IHTA s142, and so suffices for HMRC in their UK jurisdiction, does not rely on the domicile of the parties.

In the scenario you describe, person A would be deemed domicile in UK but, even if the DoV was found to be deficienct and not meet the requirements of IHTA s144 (the worst case), person A would have made a successful PET under UK law to C more than 7 years previously.

The execution of the DoV in respect of the legacy seeks to avoid any liability to IHT that wouuld otherwise arise from person A’s death within 7 years of making a PET to C.

[dedalus]

Person A ends up living here 20 years and dies here. HMRC could possibly argue that this person is UK domiciled at death.

Would a DOV made by person A to the benefit of C be still valid if at the time of making the DOV said person is not UK domiciled or with domicile position not defined with HMRC one way or the other. The risk here is that eventually person A becomes domiciled in the UK and estate inherited by person C would then be liable to high IHT.

A DoV that meets the requirements of IHTA s142, and so suffices for HMRC in their UK jurisdiction, does not rely on the domicile of the parties.

In the scenario you describe, person A would be deemed domicile in UK but, even if the DoV was found to be deficienct and not meet the requirements of IHTA s144 (the worst case), person A would have made a successful PET under UK law to C more than 7 years previously.

The execution of the DoV in respect of the legacy seeks to avoid any liability to IHT that wouuld otherwise arise from person A’s death within 7 years of making a PET to C.

Thanks.

So, for HMRC purposes, a DOV is not reliant on a) domicile of the individuals and b) where the estate is located.

Also does a DOV need to be submitted to HMRC if the domicile of the person who has died is abroad? Or is it a document that one keeps in a file
in case HMRC ask "where has all this nice money come from".

[maths]

A DoV is simply a redirection of an inheritance to someone other than the original inheriting beneficiary.

Thus a DoV can be executed by a Dom or non-Dom in respect of UK or non UK property.

However the IHT consequences will depend upon the Dom status of the deceased and location of the property which is the subject of the DoV.

No need to submit to HMRC unless requested.