Deed of variation questions
Tax Question: A relative died in Dec 2007. Probate granted April 2009 when we knew how much was left etc. Executors being really dumb and so estate not distributed and probably wont be for 10 years of more. is it too late to do a Deed of Variation in favour of my children ? I dont want the hassle of more IHT planning in 10-20 years time ! Answer: I'm afraid it is to late. A Deed of Variation (IoV) must be made within two years of the date of death; the period of two years includes the anniversary of the death. This means that all parties to the variation must have signed the document within the two-year period. There is no discretion about this. If the DOV is executed after this time, it cannot satisfy the conditions in the legislation. Tax Question: Re Deed of Variation : Can I do a Deed of Variation where instead of the money coming to me it goes either to a UK trust, an Offshore discretionary trust or a Uk or non-company, or indeed any 'Tom Dick or Harry' ? What position , if any would I have to hold in either the trust or company ? Many thanks Answer: Yes, you could use a DOV to change the terms of the will/intestate so that the money is left to a trust, company (UK or offshore). You wouldn't need to hold a position in any company or trust. This would just be treated as the deceased leaving the cash directly to the trust etc in question. Tax Question: Father set up a discretionary will trust. 4 siblings benefit and are trustees. 3 live in the UK, I am non UK resident. Trust can be ceased at any time, but will probably cease on Mother's death. Can I ask the other 3 trustees to resign (and resign their interest) when my mother dies and do a Deed of Variation (on what she leaves to me in her will) so they get the same amount of money but all that in the Trust is for me and my family and its therefore outside my estate. If they choose to end the Trust early could I give them cash from my own resources and keep their portion in the Trust? Answer: Yes, the DOV would effectively mean that your Mother would be leaving the cash/assets supposed to go to you, directly to your siblings. The other beneficiaries could be excluded from benefiting. I assume that none had a life interest and were simply beneficiaries under the terms of the discretionary trust. As the trust beneficiary the assets held in the trust would not be part of your estate, but may be subject to the separate IHT regime for discretionary trusts.
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