Deed of Variation

I imagine so because the question would then be who would be interested in enforcing its terms, and indeed who would know.

However, if it's a variation of a Will, which is the normal use for such deeds, first there are no legal parties apart from the signatory who has received a bequest and who wishes to pass it on, normally to avoid tax, directly to someone else, so I don't understand the emphasis on the word ALL in your question. Second, I don't understand why anyone who receives anything by virtue of the deed of variation, who is not a legal party to it incidentally, would want to tear it up. However, no-one can be forced to take a bequest if they don't want it, regardless of how it comes their way.

You'd probably get a better answer from uk.legal.moderated than here.

thanks Norman,

This is all relative to an inherited property imminently to be sold.

Signatories is more the term, I used the word all because the DofV is signed by 3 parties, a trustee (father) and 2 beneficiaries (sons). The trustee who 3 months ago was considered close to parting this world, but has now done a first class about turn. Both sons will now be subject to tax on the benefit. That tax will be reduced if the funds go to the trustee (father)

In other words if we 3 agree could we just destroy the DofV.

Normally Deeds are contracts. I imagine that Deeds of variation are contracts. Contracts are binding but can be varied by subsequent contracts.

However, the normal purpose of the document is to change the taxation effects of a will, and that can only be done if you inform HMRC of the new taxation regime, in which case you are going to have to keep the document for the normal tax document retention period.

Even if HMRC need not be aware of it, I would imagine it would be safer to create a second deed of variation that reverses the effect of the first. It ia conceivable that one of the parties might not actually have destroyed their copy or may have retained certified copies of it.

I imagine the second deed would need to be signed by everyone affected by the original deed.

IANAL TINLA

Are you sure? Received bequests are non-taxable, the estate having paid any inheritance tax that is due before the bequests are passed on. The sons could, I suppose, be liable to capital gains tax on the sale of the property, but since property prices have fallen considerably recently and the capital gain period would only start when the property became theirs. Since a deed of variation has to be executed within 2 years of the death of the deceased, I wonder if there are in fact any capital gains. You'd know though.

That tax will be reduced if the

thanks, the deed of variation, in our case, does not pass property ownership to us, it only passes the financial gain. So I assume at the end of my tax year I have to reveal that gain.

That sounds very reasonable. But you're clearly playing some sort of taxation game here, and should really be talking to its inventor.

Does it? I can't see how you can make a gain on something that you don't own and have never owned - unless I'm mising something!

You don't reveal gain to the taxman until you actually realise the gain, so the asset which has sustained the gain requires to be sold before the owner becomes taxable upon it. Until that happens there is no need or point in revealing anything.

I'm not sure what exactly you're talking about here. What gain? The gain in the value of the property? When did the gain occur? Before or after the guy who left the will died? If before, this gain is simply part of the deceased's ordinary estate, and is not subject to gains tax regime, only to inheritance tax. If after, this would imply some complicated trust is being set up which provides that when the asset is eventually sold, that the proceeds be split up in a nonstandard way, namely that some of the beneficiaries (call them A) of the trust will receive only the original capital value, while all of the gain goes to others (call them B), and that these B will have to pay CGT on their gain. Is this what's happening? And if so, what does the varied will say will happen if the asset is sold at a loss? Taxwise, this would mean that the B-team will be able to use that loss to set against any other gains they may make in the same tax year, but tax apart, will they have to find, out of their own pocket, funds to make good the shortfall the A-team have suffered because the proceeds of the sale are less than the original capital value they were to get?

It's not entirely clear from your story what the purpose of the existing DoV was, i.e. what tax it was designed to avoid, and what the reason for now undoing the DoV is, i.e. why you no longer wish to avoid that tax.

If the father is the husband of the deceased, then there wouldn't be any tax if the estate was left to him, but there would be tax on any amount above the nil rate band left to the sons.

You do not need to own a property to make a financial gain when it is sold by the owner (trustee) The owner (trustee) being the named person or persons on the Land Registry document. Upon a sale of the property, a Deed of Variation diverts the financial gain to another party or parties. In the following scenario.

1. The owner (trustee) has inherited the property from a deceased relative.
2. The DofV has been completed within 2 years of the deceased's death.
3. All parties (if there is more than one trustee) must agree a DofV for it to take effect.

The owner (trustee) is giving, free of all inheritance tax, the net proceeds of the sale, or his part thereof, to another party or parties.