Deed of Variation
A legal document that changes how an estate is distributed after death. Beneficiaries can redirect their inheritance to others, potentially saving tax.
A deed of variation (also called a deed of family arrangement) allows beneficiaries to change how an estate is distributed after someone dies.
How It Works
- Must be made within 2 years of death
- All affected beneficiaries must agree
- Must be in writing and state it's to take effect as if the deceased made that choice
- Treats the change as if the deceased made that provision in their will
Common Uses
- Tax planning: Redirect inheritance to skip a generation or use nil-rate bands
- Correcting mistakes: Fix an outdated will
- Adding omitted people: Include someone the deceased would have wanted to benefit
- Charity gifts: Reduce IHT by gifting to charity
Tax Benefits
The variation is treated as if the deceased made that provision, meaning:
- No gift tax from the beneficiary redirecting
- IHT is calculated on the varied distribution
- Can reduce inheritance tax significantly
Common questions
How long after death can you make a deed of variation?
Within 2 years of death to get the tax benefits. After that, redirecting your inheritance counts as a gift from you.
Can you vary an intestate estate?
Yes, deeds of variation work for intestate estates too. Beneficiaries under intestacy can redirect their share.
Does everyone have to agree to a deed of variation?
Only those whose inheritance is being reduced need to agree. If you're giving away your own share, you just need to sign.
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