Deeds of Variation allow an individual to pass some or all of an inheritance they have received on to someone else, and the recipient will be treated, for tax purposes, as it they inherited it directly from the deceased. This can often save clients thousands in inheritance tax.
A Deed of Variation can be made both where a Will has been left or alternatively where a person dies intestate.
As long as the variation is completed within two years from the date of death, the inheritance tax and capital gains tax position will be adjusted to foll0w the variation.
Often a Deed of Variation is used upon a client inheriting assets e.g from a parent if they are financially stable and keeping the inheritance may make them susceptible to paying care fees or inheritance tax on their death then they may wish for the legacy to by-pass them and go to their children.
Should the legacy go from the inheriting individual to their child(ren) by way of a gift and you subsequently pass away within the 7 years of making the gift then this gift could be liable to inheritance tax. Through completing a Deed of Variation, the liability to inheritance tax ceases immediately and prevents the estate being taxed again on their death. Therefore, reducing or sometimes even eliminating a capital gain.
A Deed of Variation can also be used to change the beneficiary to a charity or to help any uncertainly within a Will. An individual may want to make a gift to charity to ensure that the gift does not attract inheritance tax. Where the deceased has made a contribution of 10% or more to charity then the remainder of the estate benefits from a lower rate of inheritance tax at 36%.
At Ansham White Solicitors, we pride ourselves on our customer focused approach. The founding Director, Shamim Ibrahim, has 20+ years of experience in dealing with private client matters. Throughout this time, she has built up and trained a team of individuals whom maintain her high quality standard of work to ensue that our clients receive professional yet personable advice throughout their deputyship application.
Please call us today to arrange a no obligation free chat with one of our private client solicitors, we will be more than happy to help. We have offices based in North Harrow and the City of London which have nearby parking and good transport links. If you are calling from overseas or are unable to attend our office, we are able to conduct a video consultation via either Zoom or Microsoft Teams.