Deed of Variation

voip03

My uncle has left his estate to us in his will. The property was under joint ownership of both my late uncle and aunt, however, they were not married. My aunt passed away last year, the share of the property owned by her was left to my uncle in her will. The grant of probate was issued last year.
Is it possible to use the deed of variation to change my aunt's will?

getmore4less

Yes,
That way you can use the nil rate bands if not used up by other bequests.

Keep_pedalling

getmore4less wrote: »

Yes,
That way you can use the nil rate bands if not used up by other bequests.

I thought only a beneficiary could do that, is it actually possible to do it posthumously?

voip03

After her death, her name was removed from the deeds by the land registry request by my late uncle.
The nil rate band was not used, we use the nil rate band.
Late uncle was an executor and sole beneficiary of aunt will.
As an executor of my uncle's will, how do I use the deed of vernation to change her will?
How much of a % of the estate should I take control of?

nom_de_plume

If this page is factually correct, it is possible for the executors of the second estate to use a deed of variation to redirect the first estate.

Keep_pedalling

nom_de_plume wrote: »

If this page is factually correct, it is possible for the executors of the second estate to use a deed of variation to redirect the first estate.

You learn something new every day here.

One point from that link is of concern for this case.

“As the second sister has died within 2 years of the first, and provided no appointment of the share in the house has been made, it should be possible to rely upon s.144 IHTA to exempt the interest in the house from IHT if the same charities are within the discretionary class.”

The OP has now said that her share of the house was transferred to the uncle, so does that mean the DOV now cannot be done?

nom_de_plume

Another example from the same website linked to above:

I recently had a case where I was dealing with an estate that had inherited from another taxable estate (Estate A) and the estate I was dealing with was also taxable (Estate . I did a DofV by the PRs of Estate B to redirect Estate A directly to the beneficiaries in Estate B so that it wouldn’t be taxed twice. It was accepted by HMRC and a repayment of the full amount of tax was made.

nom_de_plume

Keep_pedalling wrote: »

You learn something new every day here.

One point from that link is of concern for this case.

“As the second sister has died within 2 years of the first, and provided no appointment of the share in the house has been made, it should be possible to rely upon s.144 IHTA to exempt the interest in the house from IHT if the same charities are within the discretionary class.”

The OP has now said that her share of the house was transferred to the uncle, so does that mean the DOV now cannot be done?

You certainly do!


In that example the share of the house had been left in a discretionary trust which doesn't seem to be the case for the OP so, hopefully, that will not be an issue.

getmore4less

voip03 wrote: »

After her death, her name was removed from the deeds by the land registry request by my late uncle.

The nil rate band was not used, we use the nil rate band.

Late uncle was an executor and sole beneficiary of aunt will.

As an executor of my uncle's will, how do I use the deed of vernation to change her will?

How much of a % of the estate should I take control of?

Need some numbers to make sense of what you are trying to do.

Was there IHT on the aunts estate, did any of the estate

Is there now IHT on the uncle estate?

Have you looked up quick succession relief for assets acquired in the previous 5 years where IHT was paid?

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm22041


You may also need to go back and look at the ownership and if the house was held Joint or TIC, if joint I think that can also be severed.

I think this may be a situation where you would benefit from help from an IHT specialist to get the information presented to HMRC correctly first time.

Research is good to be upto speed on what you need from your chosen specialist.

voip03

Need some numbers to make sense of what you are trying to do.
Current estate value is £550000.00

was there IHT on the aunt’s estate, did any of the estate
There was no IHT for aunt’s share, simple deed was change to joint to sole owner.

Is there now IHT on the uncle estate?
Yes only the house

Have you looked up quick succession relief for assets acquired in the previous 5 years where IHT was paid?
NO

you may also need to go back and look at the ownership and if the house was held Joint or TIC, if joint I think that can also be severed.
I think it was just joint

I think this may be a situation where you would benefit from help from an IHT specialist to get the information presented to HMRC correctly first time.
Yes, I am going to get the help from IHT specialist, before that trying to understand IHT
Research is good to be up to speed on what you need from your chosen specialist.

nom_de_plume

Another point to bear in mind is a deed of variation must be made within 2 years of the first death (aunt's).