Deeds of Variation 2026/27 | Change a Will for IHT Planning

A variation (often called a deed of variation or deed of family arrangement) lets beneficiaries change how a deceased person’s estate is distributed within two years of death. If the statutory conditions and tax statement of intent are met, the change can be treated as made by the deceased for Inheritance Tax and Capital Gains Tax purposes. That can support post-death planning involving a charity, spouse or trust, but it does not automatically create a tax saving and does not change the general-law or Income Tax position.

The window is tight and the wording matters. Every person whose entitlement is reduced must be a party to, or give the required consent for, the variation. A copy must be sent to HMRC within six months where the variation increases the IHT due; current guidance also requires the tax intention to be stated in the instrument where read-back is claimed. Model your estate with the IHT Calculator→ before instructing a solicitor.

How a Deed of Variation Saves IHT

The core principle is statutory read-back: under Section 142 of the Inheritance Tax Act 1984, a variation that meets the conditions and contains the required statement can take effect for IHT as if the deceased had made the new disposition. A redirect to a qualifying charity may therefore attract the charity exemption; a redirect to a surviving spouse may use the unlimited spouse exemption. Redirecting to direct descendants may support the £175,000 residence nil-rate band, but only where the residence and estate conditions are met.

Illustrative example — charity redirect. Assume Evelyn dies with a £500,000 chargeable estate, a full £325,000 nil-rate band available, no transferable or residence nil-rate band, and no other reliefs. Without a variation, the illustrative IHT is 40% of £175,000, or £70,000. If a valid variation redirects £100,000 to a qualifying charity, the illustrative taxable amount falls to £75,000 and IHT to £30,000. Actual estates can differ materially because of prior gifts, exemptions, residence relief, debts and the exact instrument.

The Legal Conditions

The variation must be in writing and signed by the people giving up all or part of their entitlement. It must identify what is being varied and who is to benefit, and no money or money’s-worth consideration can normally pass for the variation. A formal deed is not always required: GOV.UK says a letter or other document can work if it meets the conditions. A parent’s signature is not automatically sufficient for a child’s interest; affected minors or unborn beneficiaries may require court approval. Use the correct execution and witnessing formalities for the document and obtain legal advice where capacity or trust issues arise.

• In writing and correctly executed — a formal deed is not the only possible document.
• All people losing entitlement consent — a refusal prevents that person’s share being varied.
• Within 2 years of death — the deadline is the second anniversary of the date of death.
• No consideration — you cannot normally be paid to vary your inheritance.

CGT Read-Back: The Section 62 Election

For a post-2002 variation to read back for CGT, the instrument should contain a statement of intent that Section 62(6) TCGA 1992 applies. Do not rely on a separate Section 62 election within six months: that is not the normal procedure for modern instruments. If the required statement or another condition is missing, the intended tax read-back may fail and the CGT consequences need to be analysed as a disposal at the date of the variation. Where read-back applies, the new beneficiary generally takes the deceased’s relevant probate base cost and the variation itself is not treated as a separate gain.

When to Use a Variation — and When Not To

A variation suits estates where circumstances have changed since the will was written: a beneficiary who wants to pass the inheritance to their own children, an estate that may benefit from a charity or spouse redirect, or a beneficiary considering a trust. Do not use one where a simple disclaimer suffices — disclaiming lets the asset pass as if the beneficiary predeceased, subject to its own conditions. Variations generally cannot control a pension provider’s discretionary nomination. Pension IHT treatment also changes for deaths on or after 6 April 2027, when most unused pension funds and death benefits are brought into the estate subject to exclusions.

Real Example: Redirecting into a Discretionary Trust

George dies leaving his £700,000 estate to his son Tom outright. Tom considers redirecting £325,000 into a discretionary trust. This is not a guaranteed nil-rate-band or long-term saving: the variation wording, the deceased’s available nil-rate bands, the trust’s relevant-property regime and any later ten-year or exit charges must all be modelled. A discretionary trust may keep assets outside Tom’s personal estate, but that does not make the assets free of future IHT.

Common Mistakes to Avoid

The errors that cost beneficiaries most are omitting the required tax statement of intent, sending HMRC a copy late where the variation increases IHT, failing to obtain consent from everyone whose entitlement is reduced, and drafting the variation so loosely that it changes the tax outcome unintentionally. A variation that fails the conditions may not receive the intended tax treatment. Date and retain the signed document, keep it with the estate papers, and give the executors a copy so the estate accounts and probate records reflect the new distribution.

Costs and Timescales

Professional fees vary with the assets, beneficiaries, trusts and tax work involved; obtain a current quote rather than relying on a fixed figure. The variation must be completed within two years of death. A copy must be sent to HMRC within six months if the variation increases IHT; separate filing and statement requirements should be checked for the actual document and tax result. If IHT was already paid and the variation changes the liability, the estate representatives should use the current HMRC process to amend the account or claim any repayment; do not promise interest or a particular processing time.

Check the effect on every person involved

The beneficiary giving up the entitlement, the new beneficiary, the executors and any trustees may each need different advice. The variation may change who receives income, who owns an asset, who bears administration costs and which future tax return contains a disposal or trust charge. Compare the original and revised entitlement asset by asset, including cash, shares, land, business interests and personal possessions. A document that redirects a percentage of the residue may not produce the same result as one that identifies a particular property.

Count the two-year period from the date of death, not from probate, the grant, the first meeting or the date a solicitor is instructed. Put the HMRC-copy deadline and the date for any amended estate account on the same calendar. Before signing, read the tax statement of intent word for word and confirm that every person whose entitlement is reduced has capacity and has signed or given the required consent. Keep the final signed version, proof of delivery and the adviser’s calculation with the estate records.

Frequently Asked Questions

Evidence and coordination before signing

Create one file containing the death certificate, will or intestacy evidence, grant or probate documents, estate accounts, beneficiary entitlements, proposed deed and written consent from every affected person. Record the exact death date and the date each person signs. A deed can change the destination of an asset without changing the need to value the estate, identify liabilities or reconcile the tax position, so keep the original entitlement and the varied entitlement side by side.

Ask the solicitor and tax adviser to coordinate the legal instrument with the IHT and CGT statements of intent. Check whether the variation affects a charity, spouse, trust, minor beneficiary, pension death benefit or means-tested support. Preserve the final signed deed and any HMRC submission evidence. A calculator can compare scenarios, but it cannot confirm that the wording, consent, two-year window or tax read-back conditions have been satisfied.

Model the IHT effect with the IHT Calculator→ and check the probate position with the Probate Calculator→. Pair this guide with Inheritance Tax 2026/27 and Inheritance Gifts 2026/27 for the full estate-planning picture.

Official sources

• GOV.UK: Alter a will after a death
• HMRC Inheritance Tax Manual: IHTM35013
• HMRC Inheritance Tax Manual: IHTM35024
• HMRC Capital Gains Manual: CG31650
• HMRC: Instruments of variation IOV2
• GOV.UK: Inheritance Tax on pensions technical note