Losing a loved one is always a very traumatic experience. This trauma is often compounded by the need to administer their estate, which can often be complicated, time-consuming, and involve highly charged emotions.
Often, the thought of instructing a Solicitor at this stage can itself be equally daunting.
At Wadsworths, we pride ourselves at being able to help to take the stress of administering the Estate off the shoulders of our clients. We offer a service, entirely bespoke to those instructing us, ensuring that we neither do too much, nor too little towards the administration of an estate. We can act either just to obtain the Grant of Probate, just to deal with the financial matters or handling the entire estate.
We are able to offer a fixed fee, giving clients peace of mind that they will not be hit with a large unexpected bill at the conclusion of the matter.
Clients are often very surprised at how reasonable the costs of administering an estate are, and feel that they represent excellent value for money for the service involved.
We offer a free, no obligation half hour consultation to discuss your particular needs – and to give you general advice on whether you need the input of a Solicitor, and if so what the likely fees would be.
Deeds of Variation
We have over 25 years’ experience in dealing with issues relating to probate and administering estates and, as such, we know what a distressing time it can be for family and friends of the deceased.
We understand that there are occasions, following the death of a loved one, where a beneficiary may feel that the Will left by the deceased, for many reasons, may not have catered appropriately for a particular beneficiary or may have missed one our altogether. We also know that receiving an inheritance from a loved one can often create tax implications for the beneficiary which might not have been apparent at the time that the Will was made.
We are able to advise you of any actions that you can take to rectify such a situation; whether to provide for someone that you feel has been missed out or to vary the asset that you have received through the Will to help with Inheritance Tax or Capital Gains Tax.
One way of achieving this is to create a Deed of Variation.
A Deed of Variation allows a beneficiary under a Will or intestacy to vary or re-direct their entitlement, whether wholly or in part, to someone else. By making a Deed of Variation, the beneficiary who is entitled to part of a deceased’s person’s estate under a Will may change the way the inherited assets are owned. The Deed of Variation essentially replaces the old Will with a new one for distribution and tax purposes.
This may be done for many reasons, but mainly:
to save Inheritance Tax;
to alter the type of gift made in the Will;
to make a provision for someone who has been left out of the Will, or who has not been given adequate financial provision in the Will;
to clarify an uncertainty or defect in the Will;
to sever a jointly owned asset to avoid this passing directly to the surviving owner upon death.
It is important to note that an asset cannot be varied more than once in different deeds. However, more than one deed is allowed as long as they each deal with different assets.
The main tax implications of a Deed of Variation relate to Inheritance Tax, Capital Gains Tax and Income Tax.
Inheritance Tax (IHT)
A Deed of Variation can be used to ensure that the assets of an estate are distributed in the most tax-efficient way. Any alterations made through a Deed of Variation are treated as having been made by the deceased, and not by the beneficiary who wishes to vary their gift under the Will. This means that the gift is considered as being free from Inheritance Tax even if the original beneficiary who made the re-direction of the asset passes away within seven years thereafter.
Capital Gains Tax (CGT)
A Deed of Variation can also be used to reduce a Capital Gains Tax liability. A re-direction of an asset in this way is not classed was a disposal for Capital Gains Tax as long as it is made within two years of the date of death, and a declaration is included in the Deed. The new beneficiary is deemed to have received the re-directed asset as though they were the original beneficiary at its market value at the date of death.
Depending on an individual beneficiary’s own personal circumstances, there may also be Income Tax implications to consider. Our expert team will evaluate your circumstances and advise whether this applies to you.
It is important to consider all of the potential tax implications fully before going ahead with a Deed of Variation. We can offer professional advice on whether it is the right course of action for you.