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IHT mitigation
castle96
Posts: 3,046 Forumite
A friend/(ex legal exec) insists that when his father died, to mitigate IHT, the executors/beneficiaries mitigated IHT by merely creating additional beneficiaries by Deed of Variation. How can this be true. Everyone would do this if it is allowable, surely. I could pull 3 additional beneficiaries out of the hat.
The estate would still have the same value so ……?????
The estate would still have the same value so ……?????
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Comments
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I wonder if the thing he is referring to is doing at DOV which gives finds to grandchildren and hence it does not become part of the child's estate when they die at some point in the future.0
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It is possible to mitigate IHT for the beneficiaries through a DoV, but the only way that would work for the recently departed’s estate would be to divert some of the estate to a charity.0
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D of V - yes
Funds to go to deceased's g/children - yes
Still surely part of the estate and lable to IHT ?0 -
Which estate are they mitigating tax.
Probably their own not the deceased.0 -
No it cannot be true so either you have misunderstood or your friend was pulling your leg.A friend/(ex legal exec) insists that when his father died, to mitigate IHT, the executors/beneficiaries mitigated IHT by merely creating additional beneficiaries by Deed of Variation. How can this be true. Everyone would do this if it is allowable, surely. I could pull 3 additional beneficiaries out of the hat.
The estate would still have the same value so ……?????0 -
Think of it this way.
If my parent has a £2M estate, and I'm the sole beneficiary. Then no DoV I do at that time would avoid IHT being payable on my parents estate.
However, if I were to DoV my parent's inheritance directly to MY beneficiaries, then MY estate could avoid IHT in the future.How's it going, AKA, Nutwatch? - 12 month spends to date = 3.24% of current retirement "pot" (as at end December 2025)0 -
Just a side thought...
Does a DoV have to be an "all or nothing" thing, or can you DoV any amount you inherit??How's it going, AKA, Nutwatch? - 12 month spends to date = 3.24% of current retirement "pot" (as at end December 2025)0 -
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All going a bit off topic. He was WRONG wasn't he0
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All going a bit off topic. He was WRONG wasn't he
Depends on whether he was talking about the estate of the dear departed, or beneficiaries further down the line (i.e. mitigating IHT on their estates in due course). Could just be a simple case of crossed wires between you and him. Ask him again - and get him to explain fully.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0
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