Deed of Variation

Murdina

you're not giving away many facts but the common situation where a deed of variation might be used would be where one spouse died leaving everything to the other and it would have been better (before the recent pre budget announcement) if an amount up to the nil rate band had gone elsewhere, as this would have saved tax in the long run.
The other case I've seen them used would be to pass assets straight to grandchildren so they never form part of the parents' estate ie a pretty wealthy family already where it does not make sense for parents to inherit from grandparents only to be passing on to the grandchildren with IHT payable at each stage - cuts out a level of IHT. If just you and your sister and you both want to inherit half the property then not immediately sure how a deed of variation is going to save you any IHT.

Advent_2

Thanks Murdina I'm not sure that it would benefit us either. The way it stands is we both inherit half a property we want to live in it as our main home (we are renting) until april when the new tax year starts & the new capital gains hopefully is introduced. We then will sell & get half each. We are not talking millions around 350k.

Advent_2

Hi Jimmo
I'm not deliberately being cagey don't know what details are required ;-0
No only my lot are considering living in it - we rent at the mo. Sis is emigrating early next year & can't really sell the property til apr as she has sold up all her stuff here & has made a lot of money this tax year. I just can't understand why a deed of variation will help us in the long run all I want to do is sell up asap & use the money to make my families life a whole lot better.

margaretclare

Advent wrote: »

Hi Jimmo
I'm not deliberately being cagey don't know what details are required ;-0
No only my lot are considering living in it - we rent at the mo. Sis is emigrating early next year & can't really sell the property til apr as she has sold up all her stuff here & has made a lot of money this tax year. I just can't understand why a deed of variation will help us in the long run all I want to do is sell up asap & use the money to make my families life a whole lot better.

It looks as if a deed of variation will NOT help either you or your sister!

I would suggest that you go back to whoever suggested this 'deed of variation' idea and ask 'why?' For what purpose? What would be the benefit of doing this?

Margaret

seven-day-weekend

I know this is not what the OP is doing but I think it is very dubious to want to 'alter' someone's will; this after all is how they intended to dispose of their possessions.

You may as well leave a will saying 'all my worldly goods can be distributed by my executors as they see fit to anyone who thinks they might have a claim'.

OP, from the little I know I don't think it will help you either.

Advent_2

I totally agree I don't to change what my aunt wanted it seems morally wrong to me. But I suppose it is there to help some people.
Thanks for all the advice folks, this site is great!

Murdina

seven-day-weekend it does have its uses apart from saving tax. My mother died before her solicitor got around to changing her will to what she wanted when she found out she was dying. The DOV meant we actually did what she wanted.

localhero

It is only the beneficiary(s) that are giving up their benefit that have to agree to the Deed of Variation. The executors are often party to the Deed out of courtesy or if any additional IHT arises from it - they certainly can't refuse. So if an estate is split between 2 beneficiaries, 1 of them can vary their inheritance how they wish even if the other beneficiary doesn't. If an original beneficiary is a child though, there needs to be compelling reasons why they should give up their benefit and that will usually require the intervention of a court.

Murdina at post #12 has identified the main reasons for a DOV, though there's sometimes others.

Much less common is for CGT reasons which is Jimmo's forte rather than mine. From the limited information provided so far, I can see it causing more potential problems than it will solve.