Can a Deed of Variation save IHT?

Langtang

getmore4less said:

Langtang said:

getmore4less said:

DOV 2. Divert(some/all) the FIL estate to spouse
(not clear her how much that would save*) 


Wife then has £650k NRB and enough £350k RNRB to cover the £300k property.

Thanks again for your reply.

My MIL would not have £650k NRB, as she passed away 4 days after her husband, and so his estate wouldn't have passed to his wife anyway due to the 30 day clause in the will(s) , it went directly to my wife. If it were as easy as just DoVing across, I'm pretty sure our solicitor would have been  on to that.

As for sisters estate, my wife was FIL's step-daughter, so we weren't sure it was even going to come to my wife at all for a while due to the intestate nature of her estate..

I would be asking why a DOV can't be done with for FIL estate to make it exempt?
I would be asking why a DOV cannot be done on the sisters estate to reduce the total estate


If the FIL sister died(intestate) before the FIL then any of her estate that came to him can be DOV to someone else to reduce the size of his estate, it is a case of deciding who needs to do it executor of fathers estate  or maybe his beneficiary

The daughter being a step daughter is not relevant if his will say she inherits.

Again why can't a DOV be done?

There are questions that  the solicitor needs to be answering.

With a potentially avoidable(reduced) £110k tax bill I would be wanting to know why this cannot be done not just sitting back hoping they got it right. 

OK, thanks. 

Langtang

getmore4less said:

If the FIL sister died(intestate) before the FIL then any of her estate that came to him can be DOV to someone else to reduce the size of his estate, it is a case of deciding who needs to do it executor of fathers estate  or maybe his beneficiary

Having completed the instrument of variation checklist, it would seem that we do indeed fall into the category of being able to try to DoV my FIL’s sister’s estate to my wife. 

Other than the checklist, what else would we need to complete to allow the deed to be applied?

My wife is both executor and sole beneficiary. 

getmore4less

You will probably need to deal with HMRC as the DOV will reduce the IHT bill on the FIL estate as it looks like that return was submitted already.

there is still the options to DOV the estate to spouse to potentially reduce IHT further if needed.

Langtang

getmore4less said:

You will probably need to deal with HMRC as the DOV will reduce the IHT bill on the FIL estate as it looks like that return was submitted already.

there is still the options to DOV the estate to spouse to potentially reduce IHT further if needed.

It has been submitted already, yes.

I was a bit over pessemistic in my estimated IHT. More like 76k, with a further figure, on a newly discovered insurance bond, of perhaps 20k. I think the DoV should cover all of it. 

Thanks again. 

Langtang

getmore4less said:

You will probably need to deal with HMRC as the DOV will reduce the IHT bill on the FIL estate as it looks like that return was submitted already.

there is still the options to DOV the estate to spouse to potentially reduce IHT further if needed.

I just wanted to resurrect this old thread to thank @getmore4less for his solid and sound advice. 

I have to admit I was very pessimistic when he first raised the option of DoV, as I assumed that if it were possible my solicitor would have mentioned it (no slight on our solicitor there whatsoever)

It has taken 7 months, but we have just received a refund of ALL the IHT paid - a bus fare short of £78k. To say that we are delighted would be an understatement!

So, thank you very much to this unknown member of an online forum for his advice (also an apology for not fully believing you in the first place)