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What is a Deed of Variation?

April 25, 2023

A beneficiary of an estate may choose to vary their entitlement under a Will or the rules of intestacy (if the deceased died without a valid Will), in what is known as a deed of variation. Any changes made under a deed of variation are read back for tax purposes, as if the deceased made the changes themselves.

Some points to note:

  • A variation must be in writing and signed, usually in the form of a ‘deed’.
  • It is important that a beneficiary only alters their own entitlement under the Will, and if any other beneficiaries share under the estate is affected, consent must be obtained from them. 

Reasons for a deed of variation:

  • If you no longer wish to receive your legacy, for example if you have your own tax liability, you may wish to alter the Will to redirect this. If you gift an amount of capital over £3,000 (to anyone other than a spouse), you would normally need to survive the gift by 7 years to avoid the gift being taken into consideration for Inheritance Tax purposes. However, if a gift to you in a Will is varied, it would be as though the gift came from the deceased’s estate.
  • If you wish to pass on your legacy or entitlement to a child or grandchild who was left out of the Will- for example, a grandchild born after the deceased died and was therefore not included in the Will.
  • If there was a more tax efficient way to distribute the estate, for example to maximise nil rate bands.
  • If you wished to redirect assets into a trust.

Things to watch out for:

  • Deeds of variation can only be made once, concerning the same assets, and cannot be revoked, so it is important they are clear in their meaning and accurate.
  • Varying the Will could increase Inheritance Tax liability. It could also increase Capital Gains Tax liability, if any of the assets have increased in value since the date of death.
  • There are strict time limits when making deeds of variation, and they must be signed and executed within 2 years of the date of death. 

If you wish to execute a deed of variation or need help with dealing with an estate, please get in touch with one of our Probate Solicitors on 0121 705 7571 (Solihull Office) or 01564779393 (Dorridge Office).

Uzma Rasool
Trainee Solicitor – Wills and Probate Department

This article is for general information purposes only. It does not constitute technical, financial, legal advice or any other type of professional advice and is no substitute for specific advice based on your individual circumstances. We do not accept responsibility or liability for any actions taken based on the information in this article. For more information, please click here.