DEEDS OF VARIATION
28/08/2009
A beneficiary under a Will has always been able to assign the benefit of his gift, but a feature of the inheritance tax (IHT) legislation is that, provided certain conditions are met, the redirection of the benefit is not itself a transfer of value but takes effect for IHT purposes as if the disposition as varied had been contained in the Will. Capital gains tax (CGT) legislation contains a similar but narrower provision to the effect that the redirection need not be a chargeable event.
Such redirection has to be by instrument in writing. It does not have to be by deed but, for reasons mentioned below, it generally is, such a deed formerly being known as a “deed of family arrangement” and now more usually as a “deed of variation”.
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