Any Legal comeback on me if i agree to Deed of Variation???

getmore4less

It does not need executors approval, a DOV is still a gift from the beneficiary that is documented at the time to remove tax liability for IHT an CGT.

konark

Seems strange that when a DOV is used to avoid paying IHT or CGT it's all fine and dandy, yet when someone tries to use one to avoid losing MTB they are worse than Hitler. Yes I know one's giving and the other's taking but the net loss to the exchequer is exactly the same.

It seems as a society we hate it when the poor act in their own rational self-interest.

securityguy

"Seems strange that when a DOV is used to avoid paying IHT"

It isn't. It's used to avoid paying IHT twice on the same money.

Yorkshireman99

konark wrote: »

Seems strange that when a DOV is used to avoid paying IHT or CGT it's all fine and dandy, yet when someone tries to use one to avoid losing MTB they are worse than Hitler. Yes I know one's giving and the other's taking but the net loss to the exchequer is exactly the same.

It seems as a society we hate it when the poor act in their own rational self-interest.

Someone who has inherited, for example, £100,000 cannot be considered poor. Why should other taxpayer subsidize them particularly if they attempt to fraudulently conceal the fact? In the case of a DOV is not to avoid IHT but to avoid paying it twice.

Mojisola

securityguy wrote: »

"Seems strange that when a DOV is used to avoid paying IHT"

It isn't. It's used to avoid paying IHT twice on the same money.

Not necessarily. There may be no IHT to pay on the first estate but the money inherited would push the beneficiary's estate over the tax level. That's just plain tax avoidance.

Malthusian

Mojisola wrote: »

Not necessarily. There may be no IHT to pay on the first estate but the money inherited would push the beneficiary's estate over the tax level. That's just plain tax avoidance.

The money is still being assessed for Inheritance Tax twice. We didn't write the rules that say that the first £325,000 of inheritance is tax free. There isn't a moral difference between DOVing an estate of £325,001 (which would be double-taxed; first tax 40p, second tax £130,000 and 24p) and DOVing an estate of £325,000 (tax only payable on the second death of £130,000).

Malthusian

konark wrote: »

Seems strange that when a DOV is used to avoid paying IHT or CGT it's all fine and dandy, yet when someone tries to use one to avoid losing MTB they are worse than Hitler. Yes I know one's giving and the other's taking but the net loss to the exchequer is exactly the same.

It's not about giving and taking. It's about tax avoidance and benefit fraud, the same difference as between tax avoidance and tax evasion. Allowed and not allowed.

It seems as a society we hate it when the poor act in their own rational self-interest.

It's not rational self-interest to commit benefit fraud. Any more than it is rational self-interest to shoplift. Self-interest, maybe, but not rational.

SevenOfNine wrote:

At no time has she asked if we are in receipt of benefits, no mention of deprivation of assets.....NOTHING. She's a partner in the company, not some junior numpty still training (& cost an arm & a leg).

In fairness to her she has probably made a reasonable assumption that if you are paying her an arm and a leg for her services, and have enough money to be over the nil rate band, you aren't on means-tested benefits.

I don't know enough about the benefits system to be certain that someone with enough assets to be over the nil rate band couldn't claim MTB of some kind, but I do know it would take an unusual set of circumstances.

Yorkshireman99

Malthusian wrote: »

It's not about giving and taking. It's about tax avoidance and benefit fraud, the same difference as between tax avoidance and tax evasion. Allowed and not allowed.

It's not rational self-interest to commit benefit fraud. Any more than it is rational self-interest to shoplift. Self-interest, maybe, but not rational.



In fairness to her she has probably made a reasonable assumption that if you are paying her an arm and a leg for her services, and have enough money to be over the nil rate band, you aren't on means-tested benefits.

I don't know enough about the benefits system to be certain that someone with enough assets to be over the nil rate band couldn't claim MTB of some kind, but I do know it would take an unusual set of circumstances.

Strongly agree. On your last point someone may own a property worth say £350,000 but have very little cash so they could claim some MTBs.