Malcolm Finney looks at the quirky deed of variation and its use for Inheritance Tax purposes but warns against its abuse.
It is, of course, impossible for a testator to predict what circumstances may exist at the date of their death. In particular, they will not know the circumstances, financial or otherwise, of their proposed beneficiaries.
‘Two-year’ discretionary trusts
To attempt to combat these areas of uncertainty and often with a view to mitigating Inheritance Tax (IHT) arising on death a testator may include in the will a two-year discretionary trust (within IHTA 1984, s 144). Such a trust may offer some flexibility, but any decisions are those of the trustees and not the beneficiaries.
Deeds of variation
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