Deed of variation

buddy9

Keep_pedalling said:

That clause did not come into effect as your mother is still alive, so she inherited everything.

Is it not the case that the clause did come into effect because it is conditional on the wife surviving for a month after the death. And it entitles the sons to share a payment. This would then tie in with the son's having the potential to use a DoV if beneficial to do so.

Keep_pedalling

getmore4less said:

If my said wife shall be living at the end of the period of one month after my death then but not otherwise I GIVE the Designated Sum..... 

the clause comes into effect if she Survives.

The clause effectively says up to the nil rate band(less any gifts) gets given to the son(s).


The Will was made in 2004

Transferable nil rate band came in  9 October 2007 making the use of the nil rate band clauses redundant.

DOV to not give the remaining part of the NRB and allow it to transfer to spouse with the asset


Any reason for this to not have been a joint gift?

Apologies I misread that clause, getmoreforless is correct. 

MiniEggs

So at the moment does that mean myself and my brother will receive half each of the remaining 25k NRB money and to be fair to him at some point I really owe my brother 150k

If a DOV was used what would that mean/entail for myself/brother/mother

Keep_pedalling

MiniEggs said:

So at the moment does that mean myself and my brother will receive half each of the remaining 25k NRB money and to be fair to him at some point I really owe my brother 150k

If a DOV was used what would that mean/entail for myself/brother/mother

You don’t owe your brother £150k, your father gifted you £300k without any strings attached. Your mother however may want to even things up via her will or a gift of her own.

As for the DoV, there are a couple of approaches you could take. You could make one alone and pass your share of the remaining legacy so he gets the full 25k. You mother could then is she wished gift him £275k to even things up, or amend her will giving your brother a bigger share on her death.

Another option is that you both do a DoV so that that clause is removed and everything goes to your mother. She could then again even things up with a gift to your brother.

MiniEggs

Thanks all for your help

SeniorSam

 Do check this with your solicitor, but I consider the following as being correct.

Your Fathers Will intended to make a gift to his sons on his death of an amount (The Designated Sum)  without any liability being incurred for the payment of any taxes or duties .

However, he had gifted £300,000 5 years earlier and if he had not made previous gifts of his £3000 allowance in the tax year before that gift, then he could offset that £3000 and the £3000 in the actual tax year of the gift. In short, he had gifted £294,000 of his IHT allowance, leaving £31,000 not used. This would only change if he had used gifting allowance in the previous years.

This £31,000 is therefore the Designated Sum that he could gift to his sons on his death without liability to tax and then he  has used his Nil Rate Band allowance.

When your Mother dies, her executors will be able to offset her own Nil Rate band allowance of £325,000 as well as the  Residential Allowance of the Mother and Father - £175,000 each.  Only then will inheritance tax be payable at 40% of any sum remaining.

I do hope that this helps clarify matters for you and can see no reason to change anything with a Deed of Variation, but will stand corrected if the advantages can be explained to me. .

Keep_pedalling

SeniorSam said:

 Do check this with your solicitor, but I consider the following as being correct.

Your Fathers Will intended to make a gift to his sons on his death of an amount (The Designated Sum)  without any liability being incurred for the payment of any taxes or duties .

However, he had gifted £300,000 5 years earlier and if he had not made previous gifts of his £3000 allowance in the tax year before that gift, then he could offset that £3000 and the £3000 in the actual tax year of the gift. In short, he had gifted £294,000 of his IHT allowance, leaving £31,000 not used. This would only change if he had used gifting allowance in the previous years.

This £31,000 is therefore the Designated Sum that he could gift to his sons on his death without liability to tax and then he  has used his Nil Rate Band allowance.

When your Mother dies, her executors will be able to offset her own Nil Rate band allowance of £325,000 as well as the  Residential Allowance of the Mother and Father - £175,000 each.  Only then will inheritance tax be payable at 40% of any sum remaining.

I do hope that this helps clarify matters for you and can see no reason to change anything with a Deed of Variation, but will stand corrected if the advantages can be explained to me. .

Good point