Tax planning using Deeds of Variation

Deeds of Variation allow for tax planning opportunities by effectively rewriting the will for inheritance tax purposes. 

A statement applying s.142 IHTA 1984, allows beneficiaries of a will to transfer assets received to another individual without IHT consequences. 

There is no transfer of value by the person making the variation and IHT is computed on the basis that the will has been rewritten. This means that the tax planning window does not necessarily close at the date of the taxpayer's death. 

The deed must be made within two years of death, it must be in writing and signed by the person, or persons, making the variation. If appropriate elections are to be made, they must be contained within the deed. 

Variations can be made in respect of property passing under the law of intestacy. A variation can also be used to sever a joint tenancy so that the property can be passed under the will. 

A Deed of Variation cannot be made in return for consideration in money or money's worth. If consideration is involved, no election is allowed under s.142. “Consideration” does not include the making of another variation to which s.142 applies. This allows beneficiaries to “swap” assets acquired under a will.

An election is also possible under s.62 TCGA 1992 to deem the transfer of the asset to have been made by the deceased for CGT purposes. This means there is no disposal by the person making the variation and the new beneficiary will acquire the asset at probate value. This cancels any gain in the hands of the person making the variation.

  • For further Lancashire business news, advice and analysis subscribe to Lancashire Business View or join the LBV Hub from just £2.50 per month. Click here to subscribe now.

Enjoyed this? Read more from Andrew Robinson, STS (Europe)

Latest news

1

PM urged not to retaliate over tariffs Manufacturing

PM urged not to retaliate over tariffs

03 Apr 2025

2

CMAC Group appoints Matthew Ratcliffe as chief operating officer Matthew Ratcliffe CMAC

CMAC Group appoints Matthew Ratcliffe as chief operating officer

03 Apr 2025

3

For sale signs at The Villa Villa Wrea Green has been brought to market (Image credit: The Villa Wrea Green)

For sale signs at The Villa

02 Apr 2025

4

Montane group expands with new Lancashire hub Anthony Rae Scott Murcott And Adam Lee

Montane group expands with new Lancashire hub

02 Apr 2025

5

Trio of wins for Lancaster brand and digital consultancy Tom Grattan MD and Daniel Wallace

Trio of wins for Lancaster brand and digital consultancy

02 Apr 2025

Pc Prestonmacan Gif980x120 March
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200px
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

Lancashire Business Expo 2025
https---cdn.evbuc.com-images-880395853-4862066883-1-original.20241022-091152-2.jpeg.jpg
LBV Hub Exhibitions
04 Apr 2025 - 04 Apr 2025

Lancashire Business Expo 2025

Sir Tom Finney Sports Centre, Preston, PR1 2HE

09:00 - 15:00

The Business Network Central & East Lancashire
LBV Hub Networking
24 Apr 2025 - 24 Apr 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

People Power: Exclusive Event Series
Stay ahead in 2025.jpg.jpg
LBV Hub Seminars
29 Apr 2025 - 29 Apr 2025

People Power: Exclusive Event Series

People's History Museum, Manchester, M3 3ER

17:00 - 21:00

Planning for the future + navigating Inheritance Tax changes
Planning for the future + navigating Inheritance Tax changes for website.png.png
LBV Hub Seminars
01 May 2025 - 01 May 2025

Planning for the future + navigating Inheritance Tax changes

Stanley House Hotel, Mellor, Blackburn, BB2 7NP, Blackburn, BB2 7NP

08:00 - 10:30

A night at the races
1.png.png
LBV Hub Dinners / Balls
02 May 2025 - 02 May 2025

A night at the races

Morecambe FC, Morecambe, LA4 4TB

19:00 - 23:59

Research and Knowledge Exchange Showcase
13421_research_knowledge_exchange_2025_600x300.jpg.jpg
LBV Hub Awards
07 May 2025 - 08 May 2025

Research and Knowledge Exchange Showcase

University of Central Lancashire , Preston, PR1 2HE

09:00 - 17:00

Innovating business solutions through PhD Partnerships
30478 Skills Bootcamp open day setting.jpg.jpg
LBV Hub Networking
07 May 2025 - 07 May 2025

Innovating business solutions through PhD Partnerships

University of Central Lancashire, Preston , PR1 2HE

14:30 - 15:30

Celebrating 50 years of KTP
UCLanAerialCampus.jpg.jpg
LBV Hub Networking
07 May 2025 - 07 May 2025

Celebrating 50 years of KTP

University of Central Lancashire , Preston, PR1 2HE

16:00 - 18:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv121 Online Graphic
Subscribe now

Weekly news bulletin