I have been asked a question by a potential client. Their spouse died 12 months ago and the Estate administration has now been completed.
There were some jointly owned rental properties in the Estate and these now rest solely with the surviving spouse.
The individual now realises that their total Estate will exceed £1,000,000 and expects to survive until at least April 2020, by which time they will have a combined NRB and RNRB of £1m.
As a result they would like to transfer some property to their daughter to bring the Estate back under £1m.
A deed of variation would be preferable as the property can transfer at Probate Value. A direct gift now would result in CGT being payable due to the blended base cost for the property.
And so to my question … can a deed of variation be entered into after the estate has been administered and all assets have been distributed?
As already stated, you can do a deed of variation in these circumstances but you will want to limit the tax election to CGT, because otherwise you will use part of the spouse’s nil rate band, and the survivor will not then have an NRB of £1m. Unless one of them has been widowed before so there are potentially more NRB’s available.
I thought as much, but there solicitor seemed to be telling them otherwise.
It is obviously easier to administer before the assets have been transferred in accordance with the original will, but it felt wrong to say that it simply couldn’t be done.