Deed of Variation

Advent_2

Good evening
Could anyone shed any light on how a deed of varition can be of benefit when 2 people have jointly inherited a property & also do you have an idiots explanation as to what it actually is!
Many Thanks ;-)

netlang

I have recently initiated a Deed of Variation after my father died. The best advice I can give is to get proper legal advice and get them to look at what you are trying to do and why.

Advent_2

Thanks netlang could you tell me what it actually is? does it help reduce the amount of inheritance tax & capital gains

dzug

What it is is a legal way of the beneficiaries of an estate agreeing between themselves to split it up in a different way to that prescribed in the will or intestacy regulations.

Main reason for doing so is avoidance of future inheritance tax for which a straight gift might have potential. They might for example pass it straight to their children rather than hanging on to it or just giving it.

Murdina

It is a way of varying the terms of a will. Done right it has the effect of the new beneficiaries being treated for capital gains tax and inheritance tax (but not income tax) as if they were always the intended beneficiaries. It may be done for non tax reasons as well as tax ones but tax seems to be the main one. Make sure you do really understand why it is being proposed and that you do want to do it. Friend of mine's mother had this suggested by solicitor and to be honest when I looked at it for them I could not see that it really met their situation. I felt the solicitor just came up with it as standard advice that ticked a box.

Advent_2

Thanks all - I have spoken to 2 different accountants & neither of them suggested it to me (neither did the solicitor dealing with the estate), but my sister (the other beneficiary) has just spoken to one who said that it might be worth looking into.

margaretclare

Advent wrote: »

Thanks all - I have spoken to 2 different accountants & neither of them suggested it to me (neither did the solicitor dealing with the estate), but my sister (the other beneficiary) has just spoken to one who said that it might be worth looking into.

Is it the case that you and your sister disagree with the provisions of the will, but agree on what you'd rather the will had said?

All beneficiaries have got to agree. It can be done within 2 years of the death.

I think you need to ask yourselves what you would have liked the will to say that it didn't say. You'll need legal advice, but be clear in your own minds first.

Margaret

Advent_2

No there's no disagreement we just live at opposite ends of the country we have got very different circumstances & want what will be best for both our families & feel a bit out of our depths as we keep getting different advice

Advent_2

Does that mean that if we transferred half into our spouses names would we be able to cut down on the tax?

margaretclare

Advent wrote: »

No there's no disagreement we just live at opposite ends of the country we have got very different circumstances & want what will be best for both our families & feel a bit out of our depths as we keep getting different advice

Sorry, I didn't make myself clear. I didn't mean to imply that you and your sister disagree with each other, but that you both disagree with what the will says.

In other words, why do you want to alter what the will provides for - which is what a deed of variation would do? You need to be clear about this.

Whoever made the will presumably knew what he/she wanted done with his/her estate?

Margaret

Advent_2

oops - As far as I know no-one wants to change the contents of the will it was just suggested to sis as a way of maybe getting around some of the huge (well huge to us) tax bill that we are facing. But I am not sure of the actual gain to be made by this if any. I'm trying to get some understanding of this so that I am a bit more informed.
Thank Margaret I appreciate you taking the time to reply :T