Mr A has died leaving his estate to B and C. B and C have executed a deed of variation so that the estate is left to B, C, D and E.
E has now advised he wants to leave his share to his son F.
Is it possible to do a second deed of variation?
It is not a taxable estate.
Charlotte Otton
Thompson & Cooke
The destination of the same assets or entitlement passing under a Will or by intestacy, may not be varied more than once. Any variation that does so will not be treated as if the deceased had made it.
(Section 7)
Francesca Gandolfi
Canada Life
You can vary the estate as many times as you like, but only the first variation (in relation to a specific part of the estate / asset etc) will be effective for IHT purposes.
Hence in your example, this would be a PET from E to F for IHT purposes (the Deceased having made a gift to E via his/her Will).
Joe Cobb
JMW Solicitors LLP
You only get one ‘bite at the cherry’. See IHTM35082.
Paul Davies
Clarke Willmott LLP
In the circumstances described - No.
In Russell v. IRC [1988] STC 195, Knox J held that only the original beneficiary can make a variation to which s.142 Inheritance Tax Act 1984 applies. This has been generally accepted.
Whilst s.142 (1) refers to the variation of “(a) any of the dipositions (whether effected by will, under the law relating to intestacy or otherwise) of the property comprised in his estate immediately before his death” “by an instrument in writing made by the persons or any of the persons who benefit or would benefit under the dispositions”, other than in argument before Knox J, there appears to have been no contention that “otherwise” should include a disposition by anther instrument of variation. The wording of the section does not refer specifically to a variation only being made by the person(s) entitled on death. However, mindful that Russell has been accepted as a correct statement of the law for some time now it would perhaps be a brave (and expensive?) move to challenge it.
Paul Saunders