What is a Deed of Variation?

Applying for probate can be a Stressfull and Exhausting task, but our specialists are here to make it feel simple. In this guide, you’ll find everything you need to know about going through probate and dealing with someone’s estate.

What is a deed of variation? Can you change someone's will after their death?

A deed of variation allows you to change someone’s will after their death. This can be a good way to minimise the amount of inheritance tax that needs to be paid, but it’s essential that all the beneficiaries agree before any changes can be made.

Need help with probate?

Our friendly probate specialists are here to help you and can offer information and a free, no-obligation quote over the phone. 

CONTENTS
    Add a header to begin generating the table of contents

    What is a deed of variation?

    A deed of variation is an official document that allows the beneficiaries to change who inherits the estate. A deed of variation can either be made by the beneficiaries of a will or by the people who stand to inherit under the rules of intestacy.

    This can be a good way of reducing inheritance tax and ensuring that money ends up going to the right people – or the people who need it most.

    Why you may want to change someone's will

    • The will was written a long time ago If your loved one wrote their will a long time ago, you may find that their wishes don’t reflect how they felt at the time of their death. This could be the case if the will was written before a new relationship or marriage and doesn’t provide for their current partner. You may also want to change a will if someone was disinherited because of a temporary fallout at the time the will was written.

    • One of the beneficiaries needs the money more If one beneficiary needs the money more than the others, they may try to claim against the estate. A deed of variation is a way of agreeing a formal settlement to adjust the will and allow them to receive more.

    • You want to reduce the inheritance tax bill When people write their will, they don’t always consider the inheritance tax implications of their wishes. And even when they do, tax rules can change at any time, so there may be different options available now compared to when the will was written. This is a common reason people choose to change a will – for example, by writing in gifts to charity to secure a reduction in the rate of inheritance tax.

    How changing a will can reduce your inheritance tax bill

    The inheritance tax threshold for 2020/21, also known as the nil rate band, is £325,000. If the estate is worth more than £325,000, inheritance tax will need to be paid on anything over that value. This is usually charged at 40%.

    Here, we’ll look at the two main ways you can reduce your inheritance tax bill with a deed of variation.

    Transfer inheritance to a surviving spouse

    When someone leaves their estate to their spouse, the inheritance tax threshold doesn’t apply. This means that someone can leave an estate worth over £325,000 to their spouse or civil partner without incurring any inheritance tax.

    In this scenario, the inheritance tax allowance of the person who died is also transferred to the surviving spouse, effectively increasing the spouse’s inheritance tax threshold to £650,000. It may therefore be a good idea to transfer inheritance to the surviving spouse if they are likely to provide for the original beneficiaries in the future.

    Example: Jane and her husband, Mark, wrote their wills together and both chose to share everything equally between their two children. The estate was worth £500,000.

    When Jane died, her children realised that they would need to pay £70,000 inheritance tax from the estate. Instead, they decided to make a deed of variation and transfer the estate to their father, Mark. This meant that Mark also inherited Jane’s inheritance tax allowance, doubling his total allowance £650,000.

    When Mark dies, the children will be able to inherit the entire £500,000 estate without needing to pay inheritance tax.

    Leave part of the estate to charity

    When someone leaves behind an estate worth more than their inheritance tax threshold, everything over the threshold is known as their “net estate”.

    Usually, inheritance tax is charged at 40% on the net estate. However, if 10% of the net estate is left to charity, the amount that needs to be paid is reduced to 36%.

    Example: Polly died and left everything to her only child, Ryan. Polly’s estate was worth £525,000 and her inheritance tax threshold was £325,000. This meant that her net estate was £200,000.

    When Ryan started applying for probate, he realised that £80,000 inheritance tax was due (40% of the net estate.) This would have left him with a total of £445,000.

    Instead, Ryan decided to make a deed of variation and leave £20,000 to charity (10% of the net estate). This caused the total taxable estate to be reduced to £505,000, leaving a net estate of £180,000. It also caused the inheritance tax rate to be reduced to 36%.

    After leaving £20,000 to charity, the new inheritance tax bill was £64,800 – a saving of £16,000. Meanwhile, Ryan received £440,200 – only £4,800 less than he would have originally inherited.

    How to make a deed of variation?

    If you would like to make a deed of variation, please call our specialists today on 0808 188 9008

    We can provide you with a free quote and answer any questions you have about making a deed of variation. And if you need to apply for probate, we can help with that too.

    When should you make a deed of variation?

    You can make a deed of variation before or after applying for probate – you may even choose to make a deed of variation after the estate has already been distributed. However, if you’re making the deed of variation to reduce the amount of inheritance tax that needs to be paid, this must be done within two years of the death.

    How much does a deed of variation cost?

    A deed of variation costs £499 inc VAT. Depending on your situation and the changes you wish to make to the will, this could potentially save you tens of thousands in inheritance tax.

    Can you make a deed of variation if there is no will?

    Yes, you can still make a deed of variation if there is no will. However, it will need to be signed and agreed upon by everyone who stands to inherit under the rules of intestacy. You can find out more about the rules of intestacy here. The cost of a deed of variation is £499 plus £40 for each person entitled under intestacy rules to a share of the estate. (We must note that we cannot guarantee all people that are entitled to a share of the estate will sign so it is best to make sure first as our fees will bve retained regardless of success or failure). 

    Next

    Estate valuation. How to value a house and other assets for probate

    You can call free on 0808 188 9008 or you can call us on 0207 965 7568 for the London area (Local charges apply) or alternatively call 01380 718199  (Local charges apply).

    You can also fax us on 0844 884 8509. at 11p and up per minute from a fax machine.

    Correct as of 1-1-2021

    Please note: do not call the fax number from a mobile phone as you will be charged 50p per minute and you will not be able to speak to anyone.

    Probate Specialist Limited, 5th Floor, 167-169 Great Portland Street, Marylebone London, W1W 5PF

    Probate Specialist Limited 126, High Street , Marlborough SN8 1LZ

    For general email purposes, you can email info@psl.group 

    You can also email your specialist directly on, specialistname@probatespecialistltd.co.uk

    Please note: specialistname refers directly to the name of your specialist. You can find further information on the name of your specialist on the about us page. 

    Probate Specialist Limited, The Office, 21 Ferozeshah Road, Devizes, Wiltshire SN10 2JQ

    Company Number: 13015149

    ICO Reg Number ZA807624

    Rise to the top

    Helping Our Clients

    Our main focus is helping our clients. When they are in one of the most difficult times in their lives. The well-being of our clients is paramount to our success.

    count on us

    The Probate Experts

    We have extensively trained in Probate and we believe that we have the best systems in place to deal with your probate in a fast efficient and accurate manner. 

    Right First Time

    Best Practices

    Our systems are constantly checked on a daily basis to make sure we are capable of dealing with anything that can literally be thrown at them

    Probate
    Female-Solcitor
    Scroll to Top
    Probate Specialist

    We and selected partners, use cookies or similar technologies as specified in the cookie policy. You can consent to the use of such technologies by closing this notice. Further information is also available in our privacy policy.