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Understanding the deed
Q:
Please could you give me some general information on deeds of variation. What are the regulations governing the procedure? Must a solicitor be used or can anyone who is probate himself arrange it, as long as all parties and whoever else has to be informed of the decision made are told.
P Briggs, Oxford
A:
Leonie Kerswill replies:
A deed of variation can be used where individuals who have an entitlement under a will don’t wish to retain their entitlement and instead want to pass it on to someone else.
To be valid, the deed of variation must be made within two years after the date of death by an instrument in writing that is signed by the people who benefit or would benefit from the gifts. If a variation increases the amount of inheritance tax due, the executors must also agree and sign the variation, which must be submitted to HM Revenue & Customs. While the variation does not have to be by way of a formal deed drawn up by a solicitor – in fact, it is possible that in some cases a simple letter will be enough – it is generally advisable to seek specialist advice, particularly where the amounts concerned are significant or where land or property is involved.
In order for it to be effective for inheritance tax and capital gains tax purposes (or for one or other of them alone) the deed of variation must be deemed to have been made by the deceased. Therefore, in addition to all of the above, the deed must actually contain a statement to that effect.
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22 August 2008 [0 comments]Q:
I currently hold shares in an AIM-listed company and was about to sell these to realise losses (to offset against gains elsewhere), but the shares have since been suspended and I think the company is now in administration.
The current value based on the suspended price is around £1,400, and the realised losses based on that value would be around £12,000.
The losses are more valuable to me at the moment than the actual value of the shares themselves, and I need those available by the end of this tax year. I assume it’s not possible to roll gains forward?
Is there any way that I can now realise these losses given that I cannot sell the shares? I am wondering if gifting them might be a way of releasing the losses? I’m thinking perhaps either to my brother (but am not sure what tax implications this might have for him) or to charity (and whether I could then claim tax relief on the value gifted)?
Is any of this possible, or are there any better alternative routes? Any advice would be very much appreciated.
Mrs K Hall
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