Deed Of Variation

What is a Deed of Variation?

A Deed of Variation is a legal document that can be used to allow a beneficiary to redirect part or all of their inheritance after someone's death. It is not a re-writing of the deceased's Will or a change to the intestacy rules because although a Deed can alter how assets are disposed of, the beneficiary must have had an interest in the first place.

Why would a Deed of Variation be made?

There are various reasons why making a Deed of Variation might be appropriate, which might include:

• Passing Assets on to Children

If you make a gift in your lifetime this is known as a PET (Potentially Exempt Transfer) and in order for the amount to fall out of account in your own estate for Inheritance Tax purposes you need to survive seven years. By redirecting the asset under a Deed of Variation the gift has not been made from you but has come from the deceased's estate, hence avoiding potential Inheritance Tax in your own estate.