Opinions and insights from the Private Client team
Your inheritance questions answered
If you have received an inheritance within the last two years it’s important to understand the tax implications your inheritance presents.
What is a Deed of Variation?
A Deed of Variation is a versatile legal document which enables beneficiaries to rearrange their inheritance to better suit their needs. It can be used to give part of your inheritance to other members of your family. If so, these gifts are treated as though they had always been included in the will of the person who died. This means that you do not have to survive seven years from the date of any gift for the gift to escape paying any Inheritance Tax (IHT). For the Deed of Variation to work, it has to be completed within two years of the date of death of the person whose will is being varied.
Do I have to give the inheritance away to avoid tax?
No you don’t. If you wish to keep the inheritance for your own benefit and to give your family security in unexpected circumstances, using a Flexible Family Trust can achieve this when combined with a Deed of Variation.
How do Family Flexible Trusts work?
If you are concerned about your own IHT exposure, using a Family Flexible Trust can redirect part of your inheritance so it will not form part of your own estate for IHT purposes and so therefore will not attract the 40% IHT rate.
Whatever your individual circumstances, your inheritance can then be used to support your lifestyle, pay for your children’s university fees or even help them take their first steps on to the property ladder.
How can Roythornes help?
You can speak to a member of the Roythornes Private Client team, who will be able to tell you how to make the most of your inheritance for the benefit of you and your family