The ability to vary the terms of a Will, for tax purposes, has long been possible through a useful tool called a Deed of Variation. There have been many threats over the years that the use of these tools would be curtailed but those murmurings have never come to anything. Is that about to change?
A Deed of Variation is a document, completed within two years of a death, that a beneficiary can use to vary the terms of the Will enabling some or all of their inheritance to be re-directed to someone else. The parties can use the deed to reduce Inheritance Tax and Capital Gains Tax so they do offer an element of tax planning.
The Government has launched a consultation on the use of these documents for tax purposes to identify whether they are not being abused. The consultation ends on 7th October 2015.