A fair amount of inheritance tax (IHT) planning can be done through a will. However, the tax rules and circumstances of the beneficiaries can change making the IHT planning less effective. What steps can the beneficiaries take to rectify this?
A good deed
Wills are not always written with inheritance tax (IHT) planning in mind or the planning can be ineffective when the time comes. This can result in IHT bills that might easily have been avoided had the will been updated. The good news for the beneficiaries of a such a will is that they can reorganise the estate in a more tax-efficient way using a deed of variation. This can change how the estate is distributed between them which can also improve the tax outcome. As you would expect, there are conditions that must be met.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.