Few people realise that it is possible to change who inherits from an estate even after someone has died. Whether a will is out of date, the intestacy rules have produced an unfair result, or a beneficiary simply wants their share to go elsewhere, a deed of variation allows an inheritance to be redirected, and with the right tax elections it can do so very efficiently. The deed of variation solicitors at BWS Law prepare these documents for beneficiaries, executors, and families across Loughborough, Leicestershire, and beyond.
A deed of variation is a legal document that allows a beneficiary of an estate to redirect some or all of their inheritance to someone else. Provided the deed is completed within two years of the death and contains the correct statements, the redirected inheritance is treated for inheritance tax and capital gains tax purposes as though the deceased had left it that way in the first place.
A variation can be used whether the person died with a will or without one, and it can even be used to improve the tax position of the estate itself.
The deed of variation solicitors at BWS Law advise on every aspect of varying an inheritance. Some of the main areas our work covers include the following.
People use deeds of variation for many reasons, including:
Our deed of variation solicitors will talk through your situation, establish what you hope to achieve, and advise on the best approach.
For the tax treatment to apply, the deed must be in writing, signed within the two-year window, and contain specific statements electing for the inheritance tax and capital gains tax rules to apply. Where a variation increases the tax payable by the estate, the executors must join in as well. Our deed of variation solicitors draft deeds that satisfy every requirement, because a variation that misses one of them can be treated as simply a gift by the beneficiary, with all the tax consequences that brings.
Every beneficiary whose entitlement is reduced must agree to the variation and must be an adult with mental capacity. Where children or someone lacking capacity would be affected, court approval is needed, and we can advise on whether that is realistic. The same inheritance cannot be varied twice, and no payment can be made from outside the estate to induce a variation, so getting things right first-time matters. We keep a close eye on the two-year deadline throughout.
The intestacy rules take no account of modern family life. A deed of variation allows those who do inherit under the rules to redirect their shares, for example, so that an unmarried partner is provided for, or so that the family home passes to the person actually living in it.
We coordinate the variation with the wider administration of the estate, notify HMRC where the deed changes the tax position, and work alongside your accountant or financial adviser so that the variation fits your broader planning.
A deed of variation is a short document on which a great deal can turn. Here is what you can expect from the team at BWS Law.
The tax treatment of a variation depends entirely on the drafting. Our deed of variation solicitors prepare these deeds regularly and know exactly what they must contain, so yours will stand up to scrutiny from HMRC.
Every variation we prepare is considered against the inheritance tax and capital gains tax position of the estate and the beneficiaries, in conjunction with your other advisers where needed.
Variations often come to us late in the two-year window or at a sensitive stage of an estate. We move quickly, keep everyone who needs to sign informed, and get the deed completed in good time.
If you have inherited and are wondering whether your inheritance could be put to better use elsewhere, our deed of variation solicitors are perfectly placed to help.
Call 01509 270288 or send our team an enquiry and we will let you know quickly whether a variation could work for you.
