Thank you for your query. I am a Solicitor-Advocate in the UK and will be assisting you with your question today.
If you’d rather not accept a gift from a deceased person’s estate, you have a few options…
- You could accept the inheritance and then simply give it away. This however, could have tax implications.
- There is the option to refuse or ‘disclaim’ the inheritance. If you disclaim an inheritance it will stay as part of the deceased’s estate and will be re-distributed. The problem with this is that you have no control over where the asset goes. It could pass to someone who you would prefer not to receive it.
A better approach may be to change the direction of the gift using aa ‘post-death variation’.
UK tax laws allow post-death variations to be treated for tax purposes as though the changes to the inheritance had been put in place by the deceased, rather than the original beneficiary.
This gives a double advantage. You can avoid an adverse tax situation and choose where the inheritance goes.
But do be aware that there are specific conditions that apply to post-death variations. If these conditions are not met the tax advantages will be lost…
A variation must be in writing. This document is usually referred to as a Deed of Variation. This can be used to make post-death changes to a Will, or to re-direct a share of an estate.
A Deed of Variation must be completed within two years of the death to qualify for exemption under the inheritance tax (IHT) and capital gains tax rules. It must also contain a statement that the tax exemption rules are to apply.
I hope this answers your question. If you have any further questions, please do not hesitate to ask.