Deeds of Variation – when death is not the end - Kuits Solicitors Manchester
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Deeds of Variation – when death is not the end

Deeds of Variation – when death is not the end

24th June 2022 - Published by

When someone dies their estate is dealt with in accordance with any Will they may have left, or if there is no will, then in accordance with the rules of Intestacy.

However, there is a long-standing rule which allows the beneficiaries of a will to change the terms of it after death, so they can take advantage of more favourable tax treatment or to put into place what they think the deceased would have wanted.

For example, last year we dealt with an estate where the deceased had been in the process of putting a new will in place when he passed away.  As this new will had not been signed, the estate instead passed on the terms of a will that was almost 40 years old and did not reflect the deceased’s family circumstances.  The family decided to use a deed of variation to effectively change the deceased’s will to reflect the will that he had prepared but not signed when he passed away.

Another family we worked with used a deed of variation to make a gift of 10% of the estate to charity.  Not only did this reduce the taxable estate, it also reduced the rate of IHT from 40% to 36% as well as providing much needed funds to a charity that the deceased had supported during their life.

Deeds of Variation can be really helpful in saving Inheritance Tax, both in the estate where it is done, but even more so for future generations.  A deed of variation can be used to reduce the value of an estate so that it can still claim the Residence Nil Rate Band; it can used:

  • to put in place a trust for a surviving spouse so that spouse relief from Inheritance Tax can be claimed; or
  • where there are business assets it can be used to double the business relief that can be applied to an estate.

The Tax team at Kuits know that every estate and every family is unique.  So we provide bespoke, partner lead, advice so you can understand all the options available and decide which would be the best fit for your family now and for the next generation.

If you would to speak to one of our team to see how we can help, please call us on 0161 832 3434

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