Deed of Variation —
redirect an inheritance
A guided assistant that produces a legally-compliant deed of variation with the IHT and CGT reading-back elections built in. Must be executed within 2 years of death to benefit from retroactive tax treatment.
IHT & CGT reading-back built in
Includes the statutory elections under IHTA 1984 s.142 and TCGA 1992 s.62(6) so the variation is treated as if made by the deceased for tax.
2-year deadline tracker
The assistant warns you if the date of death is more than 2 years ago — the retroactive tax reading-back is lost past that window.
Multi-jurisdiction support
England & Wales, Northern Ireland (same IHT rules), Scotland (distinct mechanism flagged).
What is a deed of variation?
A deed of variation is a legal instrument by which a beneficiary of a will or intestacy redirects their inheritance to someone else — typically a child, grandchild, trust, or charity. When the deed is executed within 2 years of death and contains the statutory elections, section 142 of the Inheritance Tax Act 1984 and section 62(6) of the Taxation of Chargeable Gains Act 1992 allow the variation to be "read back" as if made by the deceased.
This retroactive treatment is powerful: it avoids the redirection being a lifetime gift by the original beneficiary (which would be a PET requiring 7-year survival for IHT purposes), and avoids a CGT disposal on the variation itself.
Common uses include: IHT planning (redirect to children to use multiple nil-rate bands), equalising entitlements, creating a trust for vulnerable beneficiaries, rectifying an outdated will, and qualifying for the reduced 36% IHT rate by leaving 10% or more to charity.
6-step process
- 1
Enter deceased's details
Full name, date of death, whether the estate passes under a will or intestacy. The assistant warns if 2 years have passed since death.
- 2
Identify the varying beneficiary(ies)
For each beneficiary varying their entitlement: name, address, relationship, what they originally inherited, who/what it's being redirected to.
- 3
Describe the variation
Choose the type (redirect a gift, redirect intestacy share, create a trust), then give a precise written description of the redirection.
- 4
Elect IHT and CGT reading-back
Tick the statutory elections (IHTA 1984 s.142 and TCGA 1992 s.62(6)) to benefit from the retroactive tax treatment.
- 5
Execute as a deed
Sign in the presence of an independent witness. The deed must be delivered as a deed under the Law of Property (Miscellaneous Provisions) Act 1989 s.1.
- 6
Notify HMRC if applicable
If additional IHT is payable, the executors must also sign and send form IOV2 to HMRC within 6 months of the deed.
Statutory requirements at a glance
| Requirement | Source | Detail |
|---|---|---|
| 2-year deadline | IHTA 1984 s.142(1)(b) | Deed must be signed within 2 years of the date of death for retroactive IHT reading-back. |
| In writing | IHTA 1984 s.142(1)(a) | Oral variations are not allowed — the deed must be a written instrument. |
| Elections expressly stated | IHTA 1984 s.142(2) · TCGA 1992 s.62(7) | The deed must refer to the statutory elections for reading-back to apply. |
| Execution as a deed | LP(MP)A 1989 s.1 | Signed by the beneficiary, witnessed, and delivered as a deed. |
| Consideration | IHTA 1984 s.142(3) | No consideration in money or money's worth can be given (other than another variation). |
| Notify HMRC | IHTA 1984 s.218A | If additional IHT is payable, executors must sign and file form IOV2 within 6 months. |
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Simple pricing, all-inclusive
£0.49 for 3 days only
- Deed of variation + will + other legal forms
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Legal references
- Inheritance Tax Act 1984 s.142 — Retroactive IHT treatment of variations — 2-year deadline, required elections.
- Inheritance Tax Act 1984 s.218A — Duty of personal representatives to notify HMRC where extra IHT arises.
- Taxation of Chargeable Gains Act 1992 s.62(6) & 62(7) — Retroactive CGT treatment — no disposal on the variation, new beneficiary inherits at probate value.
- Law of Property (Miscellaneous Provisions) Act 1989 s.1 — Formal requirements for execution as a deed.
- HMRC form IOV2 — Instrument of variation checklist for variations increasing IHT.
- IHTA 1984 sch.1A — Reduced IHT rate of 36% if at least 10% of the net estate passes to charity.
- Trustee Act 1925 s.57 · Variation of Trusts Act 1958 — Court approval required if a minor's entitlement is varied.
- Requirements of Writing (Scotland) Act 1995 — Execution requirements for Scottish deeds.
Check the current version of each statute on legislation.gov.uk. Before executing a deed of variation, take advice from a solicitor (ideally STEP-qualified) and a tax adviser.
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