Deed of variance questions

Boleyn19

Hi everyone,

I have a few questions about a DoV.

My brother and I are joint executors and sole beneficiaries of our mother's estate. He has two children over 18 and I have one over 18 and a 15 year old. We are both thinking about a DoV to pass some of our share of the inheritance to our children.

1. Can we make two DoV at different times, as long as they fall within the two years.

2. What would be the sequence, given my 15 year is a minor. If we don't do it at the same time should it be for a DoV (or two) for the over 18 year olds first as all beneficiaries are over 18 and then another for my 15 year old? If it was the other way round my 15 year old as a new beneficiary could not sign so it would not be allowed.

3. Are the signatories to a DoV the existing beneficiaries or the existing and new?

Thanks in advance.

getmore4less

It is important to understand what you are trying to achieve.

You can do as many DOV as you want but it will be for different bits of the estate


The current beneficiaries are in effect gifting their share with potential tax benefits only they need to make the change.

if it impacts the tax position of the estate then the executors need to agree as well.

Boleyn19

My brother and I are joint executors. There will be no impact on IHT.

If we have distributed the estate to the two of us and then make DoV for parts of our individual share do we still both need to sign?

nom_de_plume

Boleyn19 wrote: »

3. Are the signatories to a DoV the existing beneficiaries or the existing and new?

A DoV needs to be signed by ALL the executors and any beneficiaries affected by the change. i.e. those beneficiaries from the original Will who stand to receive less of their inheritance. The new beneficiaries need to do nothing.

nom_de_plume

Some reading here - https://www.co-oplegalservices.co.uk/media-centre/articles-jan-apr-2018/deed-of-variation-explained/

nom_de_plume

Also, you could simply gift your inheritance to your respective children and save the expense of a DoV. The major pitfall of this is that the gifts would form a part of your estate should you yourself pass in the next 7 years whereas a DoV makes it such that the inheritance was never yours and has no impact on your estate should such a situation occur.

Boleyn19

My brother and I are joint executors and sole beneficiaries. If we distribute the estate to ourselves and then my brother draws up a DoV giving some of his share to his children would I need to sign as I have not been impacted or have less?

Also

The HMRC sure says there are no forms and has published the criteria for a DoV so we could DIY.

As it would remove this money from his estate and lessen potential IHT when he dies would the deed need to be sent to HMRC, or do you only send to HMRC if it affects the IHT on our mother’s estate?

Your help gratefully received.

getmore4less

nom_de_plume wrote: »

A DoV needs to be signed by ALL the executors and any beneficiaries affected by the change. i.e. those beneficiaries from the original Will who stand to receive less of their inheritance. The new beneficiaries need to do nothing.

Executors do not need to sign DOV if there is no impact on the estate taxes.

getmore4less

The beneficiary gifting assets is the one that need to do the DOV, only they need to sign.

If it is an asset where there is more than one beneficiary they all need to do the DOV..

getmore4less

The criteria are critical to get the tax benefits to kick in, the alternative is accept and gift it under PET rules.

getmore4less

Have a read of the IHT manual.
https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm35000

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm35041