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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have a question regarding NIL rate banding transfer and a

Resolved Question:

I have a question regarding NIL rate banding transfer and a deed od variation to will can you help
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  TonyTax replied 1 year ago.

Hi.

I'll try to help.

Customer: replied 1 year ago.
ok how do we best proceed
Expert:  TonyTax replied 1 year ago.

If you ask your question. I'll see if I can answer it.

Customer: replied 1 year ago.
My question relates to inheritance tax NIL band transfer and a deed of variation to a will.My mother died in Dec 2003 and her entire estate transferred to my father at this point. Post my mothers death my father created a deed of variation to their will which passed £100,000 cash to his children.My father died in Dec 2015 and the estate valuation comes to just below the combined NIL banding level of £650,000. However the lawyer is now saying that the deed of variation means that the NIL banding from my mothers estate requires to be reduced, due to the transfer of assets made under the deed, and we are in a situation that there may be IH due.My view on this is that the deed of variation was post my mothers death and should be see as a gift from my father and should effect any IH NIL band transfer. On this basis the gift would be subject to PET's but as it was made over 7 years ago there should be nothing to pay
Expert:  TonyTax replied 1 year ago.

Thanks.

Let em take a look at that and I'll get back to you.

Expert:  TonyTax replied 1 year ago.

I'm afraid that the lawyer is correct.

A deed of variation is a change to the will and that is effective for Inheritance Tax purposes whether it increases it or decreases it so long as all those affected agree. The £100,000 which was re-directed from your father was not a gift from him. Take a look here and here for confirmation.

I hope this clarifies the matter but let me know if you have any further questions.

Expert:  TonyTax replied 1 year ago.

I'm just following up to find out if my answer helped or if you have any further questions.

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