Malcolm Finney examines what actually constitutes ‘consideration’ for inheritance tax purposes in the context of instruments of variation.
Instruments of variation (more commonly referred to as deeds of variation) enable beneficiaries under a deceased’s will to effectively change the will’s content, albeit only up to a point (IHTA 1984, s 142). Most variations are, in essence, gratuitous gifts
For example, where a deceased executed a will some years ago, subsequent tax changes may result in inheritance tax (IHT) consequences on the death to be more severe than was originally anticipated. Under the provisions of IHTA 1984, s 142, it may be possible, post-death, for one or more beneficiaries under the will to ameliorate some of the adverse tax consequences by effectively amending the terms of the will.
