Newspaper article The Journal (Newcastle, England)

Your Money Q&a

Newspaper article The Journal (Newcastle, England)

Your Money Q&a

Article excerpt

Q. I have read that the Government intends to review Deeds of Variation with regard to inheritance tax. Does this mean I need to review my will? A. A deed of variation is the facility to alter the terms of a will, or possibly the rules of intestacy, up to two years after someone dies. is can be for a number of reasons, but the one the Government is concerned about is that it can help people arrange an estate more tax-eciently, by diverting assets to younger generations or into possibly into trust. ey are often used where a child of the deceased feels they do not need an inheritance, which would simply add to their own estate, and diverts their legacy down a generation. It needs the agreement of the aected beneciaries., and they must be able to give their consent, so must be adults.

A deed of variation doesn't enable any tax planning other than what could be done in an up to date, well written will, it just means it can be changed, for whatever reason. If you are concerned that your will no longer reects your wishes, or could be written more tax-eciently, then consider consulting a suitably qualied solicitor (I would always recommend looking for a member of STEP, the Society of Trust and Estate Practitioners).

If your will already reects your wishes, there should be no reason to alter it. If Deeds of Variation are no longer allowed, it will be even more important to have the will written correctly, and reecting your wishes and those of your beneciaries.

Q. I am a higher rate tax payer and hold some investment in a Standard Life investment bond. I am keen to have access to the funds but would like to know the tax position. Could you explain it? A. On the assumption that the Standard Life investment bond. Is their UK version and not their oshore one then it is subject to income tax upon encashment. However, Standard Life will have accounted for basic rate tax therefore you will only be liable for the dierence between the 20% basic rate tax payer and the 40% that you would normally be due to pay. Consequently, on the assumption that there is a prot there would be an additional 20% tax to pay.

Alternatively you may be able to legally assign the ownership of the bond to your spouse and if they are a basic rate tax payer they will have no further tax liability. …

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