Chancellor to review Deeds of Variation – a useful instrument properly used to rectify defects in Wills and changed circumstances on death.

Chancellor to review Deeds of Variation – a useful instrument properly used to rectify defects in Wills and changed circumstances on death.

In his financial statement to the House of Commons on 18th March 2015 George Osborne Chancellor of the Exchequer said “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.”

Deeds of Variation (“DoV”) were introduced in Section 142 of the Inheritance Act 1982 specifically to vary or disclaim gifts under a Will within two years of the death with the agreement of all beneficiaries.

For example DoV allow children of the deceased who do not want or need their inheritance to redirect the gift to their children or others. If in the opinion of the beneficiaries someone who should share in the estate has been unintentionally omitted from the Will they can be included in a DoV.

It would be a travesty of justice if DoV where swept away simply to preserve an Inheritance Tax income stream which arises simply from error, lack of judgment, changed circumstances or poor advice.

We welcome the Chancellor’s statement that he will consult widely in his review of DoV.

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