Deed of Variation: A practical guide to changing a Will after death in the UK

When a loved one dies, the terms of their will (or under the intestacy rules if there is no will) will determine how their estate is distributed. Whilst a carefully drafted will can offer clarity, even the most thoughtful estate planning cannot always anticipate changes in family circumstances, relationships or tax considerations.

In England and Wales, there is a legal mechanism that allows beneficiaries to adjust how an estate is distributed after death: a Deed of Variation. This article explains what a Deed of Variation is, how it works and when it may be appropriate.

What is a Deed of Variation?

A Deed of Variation is a legal document that allows the beneficiaries of an estate to change how the assets are distributed. The changes are effectively a gift from person ‘a’ to person ‘b’, but if the changes are made through a valid deed of variation they are treated for inheritance tax and capital gains tax purposes alone as if they were made by the deceased person’s estate. This can have beneficial tax consequences for person ‘a’.

A Deed of Variation can be used whether or not the deceased left a will. If there is no will, it can alter how the estate is distributed under the intestacy rules in the same way.

Why might a Deed of Variation be needed?

A Deed of Variation offers flexibility in situations such as:

Providing for someone who was unintentionally left out of the Will
Redirecting assets to children, grandchildren or other relatives
Resolving family disagreements or disputes
Placing assets into a trust
Correcting ambiguities or practical issues in the Will
Reducing inheritance tax or capital gains tax liabilities.

Key requirements for a valid Deed of Variation

To be legally effective, a Deed of Variation must meet several important conditions.

1. It must be made within two years of death

This is particularly important if tax benefits are sought. Changes made after two years may still be possible, but they are treated as gifts made by the beneficiary rather than the deceased, which can create different tax consequences.

2. All affected beneficiaries must agree

A beneficiary cannot have their inheritance reduced without their agreement, and executors cannot unilaterally change the distribution.

If a beneficiary is under 18 or lacks mental capacity, court approval may be required before any variation affecting them can proceed.

3. The variation must be in writing

Although a formal deed is commonly used, a written document or letter can be sufficient provided it clearly sets out the changes and is properly signed by all relevant parties.

The document must identify the part of the estate being varied and who will benefit from the new arrangement.

4. No payment for the change

The variation must not be made in exchange for payment or other compensation. It must be a genuine redirection of inheritance rather than a commercial transaction.

5. Tax statements may be required

If the variation is intended to affect inheritance tax or capital gains tax, it must include a statement confirming this intention.

Tax implications of a Deed of Variation

One of the most significant advantages of a Deed of Variation is its potential tax efficiency. When properly structured and completed within the two-year timeframe, HMRC generally treats the revised gift as if it had been made by the deceased.

This can provide several benefits:

Inheritance tax planning: Assets can be redirected to a spouse, charity or trust to reduce IHT liability
Capital gains tax planning: The base value of an asset may be calculated from the date of death rather than the date of transfer
Long-term estate planning: Assets can be passed directly to grandchildren or into trusts, potentially reducing future tax exposure.

However, a Deed of Variation does not affect income tax or stamp duty land tax positions. Professional legal and tax advice is therefore essential before proceeding.

What cannot be changed?

Despite its flexibility, a Deed of Variation has limitations. It cannot be used to:

Change executors or guardians named in the Will
Alter a beneficiary’s share without their consent
Increase someone’s entitlement without agreement from those losing out
Override legal restrictions or previous valid variations
Change the estate’s income tax position before the variation is made.

When can a Deed of Variation be made?

A Deed of Variation can be executed before or after the Grant of Representation is obtained, and even after assets have been distributed, provided the two-year time limit is met.

The process can often be completed within a few weeks, although it may take longer if multiple beneficiaries are involved or court approval is required.

The importance of legal advice

Preparing a variation without legal assistance carries significant risk. Errors in drafting or timing can lead to unintended tax consequences or disputes between beneficiaries.

A solicitor can:

Assess whether a Deed of Variation is appropriate
Draft the document correctly
Ensure all legal and tax requirements are met
Liaise with executors and HMRC where necessary
Protect the interests of all parties involved.

Given the complexity of probate and inheritance tax rules, professional advice ensures that any variation achieves its intended outcome and complies with current law.

Final thoughts

A well-prepared will remains the best way to ensure that a person’s estate is distributed according to their wishes. However, life is unpredictable and circumstances can change.

A Deed of Variation offers a valuable second opportunity to align an estate’s distribution with family needs, financial planning and tax considerations.

For beneficiaries and executors navigating probate, understanding this legal tool, and seeking timely legal advice, can make a meaningful difference to the administration of an estate. Get in touch with us today.

“If you need a solicitor in the Ripon area H&B are excellent.“

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