H died in 2009 leaving life interest in house to W remainder to two sons. Wife has died and one son wants to vary his entitlement under H’s Will so it passes to his brother who was omitted. I believe that as long as this is done within 2 years of the life tenant’s death it can be done, even though we will be varying H’s Will who died more than 2 years ago. Please can you confirm. If this cna’t be done, how else might the remainderman give up his entitlement. Deed of gift (remainderman has not taken the gift from his dad’s Will yet so i donlt really think that is applicable). This will not have any IHT implications. Never done this before in over 30 years so any help would be appreciated.
Now that the life tenant has died, and the gift in reminder has vested in possession, the beneficiary cannot avoid a gift to the excluded sibling being a transfer of value for IHT purposes.
As the trust was created under the will of H, and H died more than 2 years ago, a variation effective under s.142 IHTA 1984 is no longer an option.
Regardless of when H died if the original beneficiary wants his sibling to take the inheritance, a deed of gift would seem an appropriate way forward. However, they will need to carefully consider the various tax consequences – not just IHT and CGT but, if property is involved, maybe also SDLT.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals