Deed of variation

Alphatauri

Hi, I hope someone can advise on a fairly straightforward query.

I applied for and received a copy of my parents probate and the associated will. If there was a deed of variation would I have also received a copy of this? If not is there a way to see if a DOV exists?

Background: A married couple who treated all their money as joint, even where accounts were in one name,  jointly gifted money in the 7 years prior to one dying. In this situation should the probate figure be 50% as “their share” of the gifts or 100% of the gifts? One child was was gifted c£100,000 and other gifts were given equally to all the children over the previous 7 years c£50,000. However, the probate figure was c£150,000 rather than the expected c£75,000 (I.e 50% of total joint gifts.) The sole beneficiary/executor did subsequently gift c£150, 000 split equally between the children but this appeared to be a further gift solely from them rather than a deed of variation. What I am trying to work out is:

a) did the executor make a mistake and quote 100% of joint gifts rather than 50%? If so, will this complicate their probate if they die within 7 years (currently I am named executor of their will). I very much hope they will live far more than 7 years, but no one can predict the future.
b) did the executor do a deed of variation for the c£150,000 they recently gifted?
c) did they jointly gift child 1 c£200,000 - £250,000? If the money had been gifted to anyone else all the children would have been told.  Whilst it is up to an individual/couple how they spend their money, I just want to make sure there is no financial abuse going on. 

I do not want to ask the executor/beneficiary as this would upset and worry them, particularly if they thought they had made a mistake.If I could confirm whether or not a deed of variation exists then it would rule in/out option b). 

Thank you

getmore4less

DOV do not have to be given to anyone they are just a gift by the real beneficiary with tax advantages if done properly.

I don't think you can derive how the gifts were accounted for without sight of the IHT return, the probate application does not have enough information.
(from what I remember its been a while)

Is the executor/beneficiary the spouse or someone else?

The issue is not accounting for the gifts correctly can impact the nil rate band of the surviving spouse.

Is there any IHT involve on first death and potentially second death.

Alphatauri

Thank you, you have confirmed my thoughts that without sight of the full probate submission I can’t establish if there was a DOV.  I know they would be upset if I asked for sight of the full probate so will not pursue this.
Fortunately they are very organised so when sadly I come to do the surviving spouses probate I can check then.


The executor/beneficiary is the spouse so no IHT. Based on the current IHT rules surviving spouse’s estate would benefit from the £1 million joint allowance I.e £325 x 2 + £175 x2 RNRB and their total estate + gifts is under this.  

Thanks again for your response

Keep_pedalling

The surviving spouse gifting £150K would have been the correct way of doing it as a DoV offered no tax advantage in thar it would use up more of the transferable NRB. Worse than tat a DoV would lose all possibility of the gift becoming exempt under the 7 year rule.

If the couple did not provide the executor with detailed records of gifts and they were paid from the deceased’s sole account then they would have no choice other than declare as a sole rather than joint gift. How long ago did the death occur?

As it stands the survivor’s estate has an exemption of £850k so any mistake only affects the estate if it exceeds that amount.

Alphatauri

Thank you, I thought a gift from surviving spouse was the right approach, I’m just not sure what the executor chose to do. As stated, I will not upset them by asking, so accept I won’t get the answer to this.

The surviving spouse was executor, they managed the finances and fully document every expenditure, gift etc. I am confident the gifts were always joint, which is why I wanted to know if the executor should have declared 50% of value of joint gifts or 100%.

I agree, under current rules the surviving spouse has £850,000 exemption remaining before IHT comes into play. Obviously the rules can and do change, I hope it’s a long time before I need to be concerned about this. 

getmore4less

Remember the RNRB(£350k of the £850k) can only be fully used if there is that amount in a qualifying residential interest(including any downsizing uplift).

Ie the survivor needs to own or have owned a property worth at least £350k