Malcolm Finney looks at deeds of variation and their potential effect for inheritance tax purposes.
To many, the deed of variation concept is a strange animal. It permits a beneficiary under a will following the death of the testator to re-direct their inheritance to someone else, whether that someone else is, or is not, a beneficiary under the will, effectively overriding the wishes of the testator.
Re-directing an inheritance
The particular attraction of the deed of variation (DoV) is that subject to the satisfying of a number of conditions (IHTA 1984, s 142), the redirection may be made in an inheritance tax (IHT) efficient manner.
Example 1: Gift under a will re-directed
Tom left his favourite painting in his will to his only son,.
