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Where Taxpayers and Advisers Meet

Deed of Variation

Jason123456
Posts: 53
Joined: Wed Oct 11, 2017 1:53 pm

Deed of Variation

Postby Jason123456 » Thu Aug 15, 2019 2:35 pm

Can a deed of variation to a will be used to reduce IHT.....if so,..how?

AGoodman
Posts: 860
Joined: Fri May 16, 2014 3:47 pm

Re: Deed of Variation

Postby AGoodman » Thu Aug 15, 2019 3:33 pm

By varying the succession so that assets pass to an exempt recipient such as a spouse.

There is no magic to it, it just allows you to rewrite the will in a more beneficial way. Obviously only useful if a more beneficial way exists.

Jason123456
Posts: 53
Joined: Wed Oct 11, 2017 1:53 pm

Re: Deed of Variation

Postby Jason123456 » Thu Aug 15, 2019 4:26 pm

Thank you!

AnthonyR
Posts: 280
Joined: Wed Feb 08, 2017 2:33 pm

Re: Deed of Variation

Postby AnthonyR » Tue Aug 20, 2019 10:08 am

Deeds of variation aren't the magical tax saving device that the media portrayed them as being (particularly when Ed Miliband was reported to have used one).

However, as AGoodman says they can be used to pass assets to an exempt beneficiary (ie a spouse) if assets are left to adult children (particularly if it was under intestacy rules). They can also be used to skip a generation or alternatively place assets into trusts which can allow for more flexibility (albeit with complexity).
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk

AnthonyR
Posts: 280
Joined: Wed Feb 08, 2017 2:33 pm

Re: Deed of Variation

Postby AnthonyR » Tue Aug 20, 2019 10:13 am

I've also used them where an estate doesn't quite meet the requirements for 10% going to charity meaning that they didn't benefit from the 36% tax rate. In this case a beneficiary agreeing to vary his entitlement to donate an extra £3,000 to charity saved the estate £20,000 in IHT.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk


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