IHT Deed of variation

getmore4less

But thats not the DOV making the potential CGT saving that's the spliting of ownerships.

With the number of potential owners of the land a trust will be needed anyway

I guess a DOV on the land part of the estate to establish the trust with all benifitiaries might be cheaper/easier than going through the gift route after the inital estate is wound up.

John_Pierpoint

Up to and including 4 people can legally jointly own land.
Children cannot legally own land, so they will have an interest in the proceeds of sale.
One of the executors could be the trustee of the bare trust that holds the land for them.

I will let Jimmo comment on the process for informing the guardian(s) of the children of their Deed of Variation inheritance and that the executor is now holding their inheritance until their 18 birthday and the resulting CGT treatment.

There have also been some notorious reports about HMRC expecting the executor to apply for planning pernission before allowing the site through probate at its existing use value.

Mind you my kids inherited a modest amount in someone's will and the solicitor involved, presumably thinking that Master & Miss Pierpoint, were in fact Mr & Mrs Pierpoint, sent Mr & Mrs Pierpoint a cheque each.

[No I did not send it back - just opened a building society account for each of them and held onto the pass booK - came in handy for them when they went to Uni about 10 years later ]

John_Pierpoint

jimmo wrote: »

That may be the problem here. You think, I think but the reality is we don't know.
When my rather elderly mother dies her will states that I and my 3 siblings will each inherit a quarter share of her estate. 3 of us are already works pensioners. 2 of us are married, one is divorced and the other is a single mother. Only 1 of us gets a State Pension. 2 of us own our houses mortgage free. One of us works full time, one works part time. We all have adult children, some are married and have children of their own. One of us still has a 32 year old child living at home.
Some of us could find a Deed of Variation very tax efficient but if one of us goes it alone would that disqualify the rest of us from doing similar?
I don't know the answer but the OP's problem seems to be much more complicated than anything I and my siblings will have to face in the fullness of time.
Given that the estate is worth more than a quarter of a million pounds I think it was a nice try for the OP to ask for advice on this forum but you and I have failed to come up with a definitive solution.
The OP really should seek professional advice.

The original poster is going to need professional advice to create a DoV and probably (say) 700 quid to pay for it, depending on how complicated he want to make the resulting trust.
[Even I would baulk at writing a DIY trust deed - I re-wrote my mum's will, when it was about 10 years old and I discovered that the nice high street solicitor had made himself an executor - the rewritten, dot matrix printed will, did exactly what it had been intended to do, when the time came.]

I am 99% sure that HMRC won't tolerate multiple DOV's, but I cannot see any reason why one will/DOV could not create multiple trusts?

Ideally the executors, the beneficiaries and HMRC should know what is happening, especially when the DoV is likely to have future tax implications. (eg it gives a chunk of the estate to the sirviving spouse and will be needed on the second death or it creates a trust subject to trust rates of income tax & CGT). But there can be situations where ignorance is bliss - such as a trust intended to support the deceased's love child.

However I think we, in responding to the Original Posters questions, are allowing the tax tail to wag the legal and family dog.
In terms of costs and family dynamics there is a lot more than tax involved in creating a trust.

Knowing they are "trustafarians", is not always a good thing for the young and impressionable.

[What was Gordon Brown thinking of, when he changed the "accumulation and Maintenance trust taxation privileges from: "up to the age of 25" to "up to the age of 18"?

Just the right age to buy a powerful infernal combustion engine and let it kill the beneficiary?].

kidmugsy

John_Pierpoint wrote: »

[What was Gordon Brown thinking of, when he .......

Insert practically anything he did in office.

John_Pierpoint

I thought I would share with you this portrait of a "trustafarian" who has come into his inheritance:

http://www.youtube.com/watch?v=gNz-P5WMQ8w&feature=related

Anyone recognise the backdrop - perhaps Google failed to get its camera car into that setting?