I have been instructed to deal with an intestate estate by the deceased’s only sibling. The deceased was not married and had no children. His parents are still alive but do not want to be involved in the administration or benefit from the estate which they want to go my client. My understanding is that the best way to deal with this is for the parent to assign their interest to my client, who can then apply for the grant pursuant to NCPR r24. However I am unable to find a precedent Deed of Assignment. Can anyone point me in the right direction?
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I suggest they use a deed of variation, effective under s.142 Inheritance Tax Act 1984 (and s.62(6) Taxation of Chargeable Gains Act 1992?) so as also to avoid the potential tax issues.
A variation can be made pre-grant, even under an intestacy, enabling the new beneficiary to apply for the grant.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
While a deed of variation is effective for inheritance tax, and indeed capital gains tax, purposes, the Probate Registries do not recognise a deed of variation.
For Probate purposes the parents will either have to assign their entitlement over to their son or they can disclaim their right to the estate and the son could then make the application as the next person entitled to the estate on intestacy. One of them could of course appoint their son as an attorney for the purpose of applying for the Grant, which could then be followed by a deed of variation for inheritance tax and capital gains tax purposes.
I agree with Cliona’s post, but if a disclaimer is used do ensure that there are no other siblings or issue of deceased siblings.
In any event, you may wish to check the parents’ finances - to consider whether intentional deprivation rules may apply, and whether there are any creditors who may be disadvantaged.
Hi, I was wondering what you decided to do in the end?
I have a similar matter where the Probate Registry has advised me to get the brother of the deceased (the entitled beneficiary) to do a Deed of Assignment to assign his interest to his son (rather than a disclaimer) and so that the son can apply for the Grant.
I am concerned however about the tax consequences. It is important that the deceased’s estate is not added to the brother’s as he is 87 and his estate would already taxable. Is there another document referring to the provisions of s 142 (1) of the Inheritance Tax Act 1984 and s 62(6) of the Taxation of Chargeable Gains Act 1992 that i should also get the brother to sign or is this not necessary?
An interesting view from the Probate court - clearly with no eye to any wider implications of the suggested course of action. Was their “advice” accompanied by a statement that they do not give legal advice?
If the brother does not wish to receive the inheritance then absent a disclaimer, he should consider a deed of variation, effective under s.142 IHTA 1984 and s.62(6) TCGA 1992. This will avoid him making a gift of the inheritance for IHT purposes.
Whilst one would hope that the Probate team would accept this as sufficient to enable the beneficiary of the variation – the son? – if whoever deals with it there is looking for something labelled “Deed of Assignment” it may take a little longer to get them to appreciate the variation is as effective as an assignment for their purposes.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
I have now encountered the same problem, slightly complicated by the fact that, before I was instructed, the person entitled under the intestacy rules executed a Deed of Renunciation so there is no scope for her to just appoint an attorney to apply for the Grant and then do a Deed of Variation.
Although I sent them the draft Deed of Variation to have a look at (a Withers precedent one) the Probate Registry are insisting on a Deed of Assignment. I’m proposing to reword the Deed of Variation so that the beneficiary ‘wishes to vary… by assigning etc…’ but I just wondered if anyone has come across a suitable precedent accepted by the Probate Registry since the original post?
I have found out that the Probate Registry do have guidance saying ‘some Deeds of Variation contain the necessary assignment and should then be referred to the Registrar…’ However, their starting point, in an email to me is ‘a Deed of Variation is a document that is used to vary the inheritance tax liability and as such does not contain the necessary wording required to assign the right to the estate of another’. …
I would be grateful of any suggestions to help me advance this application.
