Phew! Changes to Deeds of Variation not so imminent
Deeds of Variation have been a long-standing tool used to vary the distribution of a person's estate after they have died. Therefore in March, when the Government announced its review into Deeds of Variation there was strong concern among professional advisors about how this would impact their clients. Following the Autumn statement in November, the Government has announced that they will not be introducing any new restrictions to the way that Deeds of Variation are currently being used but they will be kept under review – a relief for now!
Deeds of Variation are particularly useful when the deceased's Will no longer reflects the most recent wishes known to their family, or there is no Will, or to resolve a family dispute. If the Deed is executed within two years of death, then the changes are treated as if they were made by the deceased for tax purposes, which can provide a favourable tax treatment. This could include reducing inheritance tax by an increased gift to a spouse or a gift to charity, or diverting gifts from the main beneficiaries to their children to help their own tax planning.
It is important to remember that Deeds of Variation need to be tailored to specific circumstances and of course require the consent of the beneficiaries affected by the changes. If you would like to know more about how Deeds of Variation can be used, please contact Abbey Adams or your usual Blake Morgan adviser.