DEEDS OF VARIATION/DEEDS OF FAMILY ARRANGEMENTS
Synopsis: HMRC has launched a call for evidence to inform a review of the use of deeds of variation for tax purposes to ensure that they are not being abused.
A review into the use of deeds of variation in tax planning was first mooted in the March Budget and today HMRC has launched a call for evidence to inform this review.
The aim of the review is to explore how frequently and in what circumstances deeds of variation are used for tax purposes; examine how the current tax rules around deed of variation are operating and establish what changes, if any, should be made to these rules.
The call for evidence, which will run for 12 weeks, takes the form of a questionnaire that has been designed with the aim of understanding the extent to which tax advantages factor when a decision is made to vary a will by a deed of variation.
The deadline for receiving responses is 7 October 2015 and while anyone can respond, HMRC are particularly interested in hearing from individuals, or professionals who have experience of or are considering using a deed of variation.
COMMENT
Deeds of variation provide a unique opportunity for clients who have inherited large sums of money to achieve an immediate reduction in their estates while retaining access to the gifted sum without any gift with reservation issues. Although a variation will not usually reduce the amount of IHT payable on the deceased’s estate, it will invariably prevent aggregation of the inheritance with the estate of an otherwise wealthy beneficiary thereby deferring any secondary IHT liability by one or more generations. Those contemplating using this device should therefore bear in mind that changes may be on the horizon and consider taking action sooner rather than relying on the 2 year limit currently available.
Why not talk to the professionals about properly managing your finances
Call us on 01273 457100 | 020 7871 5387 | 01403 333666
Or email us on info@opusgold.com
Or just take a look at how we help our clients www.opusgold.com