Are we able to accept a Deed of Variation drawn up by a UK beneficiary to a US will?
Are there any known issues or things to be aware of?
There are no geographical limits to a deed of variation - it is in effect a gift by one or more beneficiaries with some special tax sauce. You do however need to be sure of the effects under US law/tax, which will ignore sections 142/62
Provided that the assets subject to the variation are now in the UK, the US aspects fall away.
If any are still outside the UK, then you need to understand the effect of the variation in that jurisdiction.
Although the US tax regime also allows for the variation of an estate, the rules need to be strictly adhered to – as Andrew indicates the UK tax legislation has no application in the US.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Also that someone drawing a variation to have effect in the US might not remember to comply with the UK rules - in particular to make the statement required by s.142(2) Inheritance Tax Act 1984.
As Paul Saunders has indicated, you need to be very careful if the assets involved are not in the UK, but for example are in the USA. Also is the Deceased a USA Citizen, was he/she domiciled in the USA? Are the Beneficiaries UK citizens and residents, domiciled in the UK? I would advise proper legal advice be obtained in the USA as to the effect under US tax law of the Deed of Variation.
Many people forget that USA Estate tax applies world wide and if there is no Estate tax treaty (there is one between the UK and the USA) the US estate Tax can be significant (on a scale up to 40%), This could mean that the underlying assets are subject to USA Estate Tax (highly unlikely probably in view of the allowance for US Citizens at the moment of about US$13,610,000), but be careful.
Peter Double/ Probate Resealing Services
The question is ‘a’ beneficiary meaning one/1…something is missing?