Simple one (I think!) around Deed of Variation

A question about : Simple one (I think!) around Deed of Variation

My Dad died leaving a will. He was in the process of drafting a new one when he died, which differed only in that it made some specific bequests that were absent in the original.

My sister and I are residual beneficiaries of the valid will, but would like to acknowledge his intentions, which have no bearing on IHT on the estate. I figure we should do this via Deed of Variation, as just making a payment to the new beneficiaries from our own inheritance (his cleaner and our children) might introduce PET issues should one of us die rather sooner than we'd hope. So, I am assuming that this is something we can do when I get to the point of distributing the estate as no bearing on HMRC's perspective - but, I am not clear on where the Deed is lodged / recorded. Can I just lodge it with the final estate accounts? Or does some power that be need to acknowledge it prior to that?

Best answers:

• If one of the specified beneficiaries is under 18 you can't do a Deed of Variation. If that doesn't apply then you'll need the agreement of all the beneficiaries (not just the residual ones) and a properly drawn up Deed so go and see a solicitor. You could DIY but it is too important a document to not invest a few hundred Јs in getting it done properly.
  Far easier to simply make the gifts yourselves. The PET rules only come into play if your estate is likely to be over the IHT limit and you don't survive 7 years. Also you've got a Ј3,000 gift allowance for this year each and Ј3,000 for last year as well.
• How old are your kids?
  It may not even need PET gifts for their money.
• HMRC have a reasonable page on DOV and making sure they are valid for tax purposes
  https://www.gov.uk/government/upload...73615/IOV2.pdf
• My estate would be over IHT limit. And the sums involved are high enough for PETs to come into play ie >Ј10k for each of my children and Ј5k total to his cleaner (who was more a carer and deserves every penny). But I'm not planning on dying any time soon, so not sure I'm not prepared to take the risk of an unlikely and diminishing approx Ј10k tax bill over spending a few hundred quid with a solicitor. It strikes me that it's a very simple variation - is a solicitor really needed?
• Its Ј10k extra tax for 7 years all or nothing.
• My children are both
• Check the cost of a 10k life insurance policy for 7 years if really bothered about it.
• Taper relief does not apply to gifts below 325k in the last 7 years.
  have another read of the regs,
  if the only gifts in the 7 years were the 25k no taper relief on those gifts.
  it is a very common misunderstanding of how taper relief works.
• Going back to your original post OP, if the IHT position isn't affected then no-one really needs to see the DoV. You do need to keep it and with the Estate Accounts would be best.
  I wouldn't personally think it's something that you can knock up yourself because it might have to be used in the future to explain the gifts were not PETs or deprivation of assets. I have no idea if there are precedents online.
  It should be something that could be done at a solicitors for a fixed fee so perhaps make enquiries about costs.