Speak to a solicitor today
01276 692233

Twitter Linkedin

Inheritance Tax - Deed of Variation

will-pic-1 Tax Planning - Deed of Variation

Well- informed beneficiaries of an estate will know of the wonders of beneficiaries varying the terms of a Will after death to legitimately save tax; as ever, knowing something exists and having a fully operational understanding of a law are two entirely different things; Take this neat example of a saving that can be made since George Osborne's introduction of the Residence Nil Rate Band (RNRB) in 2015 and which is currently a £150,000 allowance (and come 5th April will reach its maximum of £175,000):-  In his will Testator gave his £300,000 home to his unmarried cohabitee and £300,000 cash to son.  Whoops! Total estate £600,000 and Inheritance Fax of £110,000 payable (being 40% of £275,000 (£600,000-£325,000 being Nil Rate Band (NRB).
Foster Harrington would advise the two beneficiaries to alter the will by a Deed of Variation switching the two gifts. Why? The RNRB is only available to lineal descendants of the deceased; the son is one such and the co-habitee isn't!  By switching gifts the RNRB is fully utilised and the Inheritance Tax payable is reduced from £110,000 down to £50,000 (£60,000 being 40% of £150,000 RNRB)  Deeds of Variation are technical and have options taking into account Inheritance Tax with or without Capital Gains Tax implications . We have specialised in such documents since the 1980s and are well-positioned to save inheritance tax for the familyIt is worth noting that wills should be revisited periodically ( every 5-10 years and certainly after a major Inheritance Tax change like the introduction of RNRB).   In addition wrinkles and qwerks from new legislation appear gradually and we are on top of all such developments for you.  

Well- informed beneficiaries of an estate will know of the wonders of beneficiaries varying the terms of a Will after death to legitimately save tax; as ever, knowing something exists and having a fully operational understanding of a law are two entirely different things; Take this neat example of a saving that can be made since George Osborne's introduction of the Residence Nil Rate Band (RNRB) in 2015 and which is currently a £150,000 allowance (and come 5th April will reach its maximum of £175,000):-  In his will Testator gave his £300,000 home to his unmarried cohabitee and £300,000 cash to son.  Whoops! Total estate £600,000 and Inheritance Fax of £110,000 payable (being 40% of £275,000 (£600,000-£325,000 being Nil Rate Band (NRB).

Foster Harrington would advise the two beneficiaries to alter the will by a Deed of Variation switching the two gifts. Why? The RNRB is only available to lineal descendants of the deceased; the son is one such and the co-habitee isn't!  By switching gifts the RNRB is fully utilised and the Inheritance Tax payable is reduced from £110,000 down to £50,000 (£60,000 being 40% of £150,000 RNRB)  Deeds of Variation are technical and have options taking into account Inheritance Tax with or without Capital Gains Tax implications . We have specialised in such documents since the 1980s and are well-positioned to save inheritance tax for the familyIt is worth noting that wills should be revisited periodically ( every 5-10 years and certainly after a major Inheritance Tax change like the introduction of RNRB).   In addition wrinkles and qwerks from new legislation appear gradually and we are on top of all such developments for you. 

 

 

Foster Harrington honoured by Cancer Research UK
 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Sunday, 11 April 2021

By accepting you will be accessing a service provided by a third-party external to https://www.fosterharrington.co.uk/

For qualified and expert legal advice please get in touch on 01276 692233 or use our contact form and we will call you back.

Accredited CQ logo rgb family law resolution logo  Society of Trust Estate Practitioners

Legal Information

Email Disclaimer | Copyright | Cookies & Privacy | Statutory Information | Website Disclaimer  | Privacy

Foster Harrington is the trading name of Foster Harrington Solicitors Limited. Foster Harrington Solicitors Limited is a limited company registered in England and Wales (with registered number 08472565) and its registered office is at the above address. It is authorised and regulated by the Solicitors Regulation Authority (SRA no 599319). VAT Registered No 384 3092 44.

Contact Us

Foster Harrington Solicitors Limited
22 Park Street, Camberley, Surrey, GU15 3PL

Call us on 01276 692233 or email info@fosterharrington.co.uk