How to redirect your inheritance within two years of death to reduce IHT, provide for overlooked family members, or move assets into trust — and the exact rules you must follow.
This guide is part of ProbateHelp's Wills & Planning guide cluster. Estimated reading time: 14 min.
A qualifying variation can treat the redirected inheritance as passing from the deceased rather than as a gift from you, so your seven-year clock does not start. HMRC says a variation can still be made after an asset has vested in you, although transferring an asset or its sale proceeds may need extra legal work.
A variation can increase a charitable gift. The 36% rate has a detailed 10% test based on the baseline amount for the relevant component of the estate, not a simple percentage of the headline estate value. Ask a tax adviser to calculate it before signing.
You cannot reduce another beneficiary's entitlement without their agreement. A willing beneficiary may be able to redirect only their own share, leaving the other beneficiary's share unchanged.
You may still make an ordinary gift or other transfer, but it will not receive the IHT or CGT read-back treatment. For IHT it may be a potentially exempt transfer or an immediately chargeable transfer, depending on the recipient and structure.
A variation under section 142 applies to property passing under the will, intestacy or a qualifying death disposition. Discretionary pension death benefits normally pass outside the estate, so the beneficiary cannot redirect them through a deed of variation of the estate.
Yes. The estate accounts should show the varied distribution. If the IHT account changes, the personal representatives may also need to give HMRC the variation and corrected tax information.
Yes. A beneficiary can redirect their entitlement to a new recipient, provided the instrument meets the legal and tax conditions and does not reduce another person's rights without consent.