Deeds Of Variation – Will They Survive?

In the 2015 budget, the Chancellor announced 'I can also tell the House that we will conduct a review on the avoidance of inheritance tax through the use of deeds of variation. It will report by the autumn.'

The move is ostensibly part of the government's wider review on tax avoidance strategies, although there have been suggestions of political point-scoring given publicity surrounding Mrs Miliband's use of a deed of variation following her husband's death.

A deed of variation allows a beneficiary of a deceased's estate to 'reorganise' the will and alter what he or she is entitled to receive from the estate, transferring to another beneficiary all or part of the interest that he or she has inherited. Often the intention is to enable assets to 'skip a generation'. Motives (often overlapping) for making such a variation range from a desire to provide for others who have greater financial need; putting right errors in the will without need for a rectification claim;