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Inheritance Tax – What is a Deed of Variation?

My Mother has excluded my Sister from her Will leaving
everything to me. I don’t think it’s fair, is there anything I can do about this and if so, are there any inheritance tax consequences for me?

You can give your Sister a financial gift from your own money once you receive your inheritance if you so wish. However, for the value of this gift to fall outside your estate for inheritance tax purposes, you must survive the gift by 7 years.

Alternatively, if it is under 2 years since your Mother died you can make a DEED OF VARIATION which will vary the terms of your Mother’s Will. Allowing you to divide her estate however you wish. All parties affected by the variation must agree to it but if minor children are affected, the court’s permission may be required. This will mean, if you varied your Mother’s Will to pass some money or a percentage of her estate to your Sister, it would be treated as though the gift had been made from your Mother’s estate rather than a gift from you. Therefore the 7-year rule as mentioned above does not apply.

Certain conditions must be complied with in order for there to be no inheritance tax implications for you. So it is extremely important the wording in the Deed of Variation is correct.

Should you wish to consider this, one of our experienced probate solicitors can guide and assist you with the preparation of the document. Providing you with peace of mind that all formalities have been complied with.

For further information please contact our Wills & Probate team.

Gaynor Cooke

Gaynor Cooke

Partner & Head of Wills and Probate

 

Broadstone
01202 692448

Christchurch
01202 482202

Verwood
01202 823308

Wimborne
01202 881454

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