Its very name sounds deadly dull but this week the oddly titled Deed of Variation has hit the UK headlines.
After becoming a political football, with suggestions it is tax evasion, and other hints that it could soon be banned, you may wonder what on earth a Deed of Variation is. But if you have inherited any money at all, you could then benefit from the totally legal practice of doing a Deed of Variation. I advise clients on these things every day, and as a firm we do hundreds of them for people across Somerset.
The current law is that if someone inherits money from a Will or sometimes when there is no will, within two years that person can sign a legal document to give it to someone else. This can save Inheritance Tax and Capital Gains Tax in the longer term. This is DoV in a nutshell. Such a practice is sensible tax planning – it is not tax evasion. The DoV changes things so that it seems that if the person that died made the gift and not the person making the DoV. It does sound deadly dull but Westcountry residents would do well to explore all options with inheritance. The DoV could be the most sensible thing they do this year.