Deed of Variation
Want to give more to family or charity?

When someone passes away, their estate is usually distributed according to their Will or the rules of intestacy, but it can in fact be a good idea for the will outcome to be tweaked. If the beneficiaries want to make some changes, that’s where a Deed of Variation (DoV) comes in.

A DoV allows beneficiaries to redirect their inheritance, whether money, investments, property, or other assets to someone else or even a charity. It’s as if the deceased had made that decision themselves. This can be useful for inheritance tax (IHT) planning, family arrangements, or charitable giving.

Here are the key points:
• Timing matters: It must be completed within two years of death.
• Tax benefits: If more than 10% of the net estate goes to charity through a DoV,
the IHT rate on the taxable portion drops from 40% to 36%.
• No seven-year rule: Normally, lifetime gifts trigger a “potentially exempt transfer (PET)” requiring the individual making the gift to live seven years for IHT exemption. A DoV avoids that.

Because it’s a formal legal document, there are rules:

• It must be in writing, signed, and irrevocable.
• It should clearly state of course and what’s changing and who benefits.
• Each beneficiary can vary their share, but only once.
• You only need to send the DoV to HMRC if it changes the IHT payable on the
estate.
• It will incur costs to create.

A DoV may be a smart way to manage family wishes and reduce future tax depending on the circumstances, but it’s important to get it right and so legal advice will be needed.

This information is purely for information purposes and should not be construed as advice. For advice based on your individual needs and circumstances please contact your Financial Planner. Tax rates, reliefs or allowances are correct for 2025/26 tax year. These are subject to change.

By Andy Robinson |  January 2026