'll explain better: a has died and b has inherited from a but b is old and wants to donate to c.
as I understand it a dov written by b would help c avoid iht on b death.
is this correct?
Correct.
If b executed an instrument of variation then the property b was due to inherit from a would not be so inherited and c would be treated as if c had inherited the property directly from a. As a consequence, on b's death his estate is smaller than it would otherwise be and hence IHT would be less on b's death estate.
The domicile/deemed domicile status of the parties is relevant. For example: if b is not UK domiciled (or deemed domiciled) and the property he inherits from a can be located overseas then it would then on b's death be excluded property and no IHT charge would arise thereon when b leaves it to c; hence in this situation there would be no necessity to execute a variation.