The importance of making a Will – Inheritance Tax and Deeds of Variation

The importance of making a Will was demonstrated again today. Unfortunately the late Rik Mayall died intestate (without a Will). As a result his family, and in particular his children, faced a large inheritance tax bill which otherwise could have been avoided had he made a Will leaving his estate to his spouse, as any gift between spouses are exempt from inheritance tax. One possible solution is for the family to enter a Deed of Family Arrangement (commonly known as a Deed of Variation) which in effect redirects an estate, provided all the beneficiaries agree and they are all over the age of 18. If any beneficiary is under the age of 18, the Deed of Variation must be sanctioned by the Chancery Division of the High Court.

However, the HMRC recently announced (just before Parliament was dissolved) that they are investigating Deeds of Variation and it is foreseeable that this “safety net” might well be removed by a future Government. This will mean that writing a Will is all the more important as, if the law is changed and Deeds of Variation are withdrawn, the ability to change the statutory provisions on intestacy might no longer be in available in the future.

More Information

Space only permits the briefest details to be outlined in the article. This is a complicated area of law and for more information or further details please contact, Colin Glass at DWFM Beckman, 101 Wigmore Street London W1U 1FA, telephone 020 7408 8896 or email [email protected]

About the Author

Colin Glass is a partner and Head of the Wealth Protection and Private Client Department at DWFM Beckman Solicitors. He has over 24 years post qualification experience, advising on Lifetime and Inheritance Tax Planning, Wills, Trusts, Probate, Powers of Attorney and Court of Protection matters. He also advises non-resident and non UK domiciled individuals who hold assets in the UK and deals with international probates.