Is it possible for an English firm of solicitors to prepare a Deed of Variation of a Scottish Will and Estate administered in Scotland? Does the same English legislation apply i.e. elections pursuant to Inheritance Tax Act 1984 s142(1) and the Taxation of Chargeable Gains Act 1992 Section 62(2). Do such elections have to be sent to HMRC (they do not under English rules)?
There was a helpful historic thread on the forum (Deed of Variation of Foreign Will) with a detailed reply by Richard Frimston of Russell-Cooke LLP but unfortunately this is no longer accessible.
Thomson & Bancks LLP
Both the Inheritance Tax Act 1984 and the Taxation of Chargeable Gains Act 1992 apply to the whole of the UK – they are not merely “English” laws.
As to whether a variation of the dispositions of an estate administered in Scotland under a Scottish will may be drafted by a non-Scottish solicitor is a matter over which there has been debate.
My view is that as the legislation provides for a variation of the dispositions of the estate, and not for the variation of the will (or intestacy), in principle there is no reason why such a variation cannot be drafted by lawyers who are not qualified under Scottish Law.
The original beneficiary is making a gift of all or part of their inheritance. If the gift is out of the estate that remains undistributed, then the variation may well need to comply with the requirement to make a valid gift under the law applicable to the administration of the estate. However, if the gift is of assets already distributed, then it no longer has a connection to the estate (other than for the purposes of the declarations under s.142 IHTA and s.62(6) TCGA so that, in the instance in question, Scottish Law would have no relevance.
Provided that the variation in question contains the declarations to comply with both (or either) of the IHTA and the TCGA, the variation should be effective for UK tax purposes. It is only if the variation results in an increase, or decrease, in the IHT payable in the estate that the variation is now required to be submitted to HMRC.