What are the advantages of a Deed of Variation?

borntobemild

Hi - I'm the executor for my mum's estate and the residual beneficiary. I want to give my brother some money - he wasn't left any. Is it best to do a Deed of Variation, or should I just give it to him? It doesn't affect anyone else.

Yorkshireman99

borntobemild wrote: »

Hi - I'm the executor for my mum's estate and the residual beneficiary. I want to give my brother some money - he wasn't left any. Is it best to do a Deed of Variation, or should I just give it to him? It doesn't affect anyone else.

If you give him money it might affect any IHT on your estate. The DOVwill avoid that.

borntobemild

Thanks. The estate is too small for IHT so that's not an issue.

Yorkshireman99

borntobemild wrote: »

Thanks. The estate is too small for IHT so that's not an issue.

Just to emphasise it is the value of YOUR estate that could be affected since gifts are added back for seven years,

borntobemild

Ah - slow of me. Thanks for the clarification.

AnotherJoe

The only real value is if you die in the next 7 years.

TcpnT

The only real value is if you die in the next 7 years.

and your potential estate including the value of the gift exceeds the IHT threshold If not it makes no difference

Keep_pedalling

You have not mentioned the amount, but up to £6000 could be covered by your annual exemption if you have not made any other substantial gifts in this and the previous tax year.

borntobemild

It looks like I can do this by writing a letter. What I can't find out from Google is what I do with this letter. Anyone know?

Keep_pedalling

borntobemild wrote: »

It looks like I can do this by writing a letter. What I can't find out from Google is what I do with this letter. Anyone know?

You said the amount is small, how much are we talking about here?

borntobemild

£12k. Small as in irrelevant for IHT etc.