What Is a Deed of Variation?
A deed of variation (also called a deed of family arrangement) is a legal document that lets a beneficiary redirect all or part of an inheritance they have already received to someone else. HMRC and the courts treat the redirected gift as if it came directly from the deceased — not from the beneficiary — for Inheritance Tax and Capital Gains Tax purposes.
Common Uses
- Passing assets to the next generation — a parent redirects an inheritance directly to their children, skipping one generation of IHT
- Charitable gifts — directing part of the estate to charity reduces IHT and may bring the estate rate down to 36%
- Correcting an outdated Will — redistributing assets to match the deceased’s actual wishes more closely
- Creating a trust — redirecting assets into a discretionary trust for better long-term control
Requirements
| Requirement | Detail |
|---|---|
| Time limit | Must be completed within 2 years of date of death |
| Who must agree | All beneficiaries affected by the variation must consent |
| HMRC notification | Required within 6 months if the variation reduces IHT payable |
| Form required | Written document — does not need court approval |
| New consideration | Beneficiary must not receive payment for making the variation |
💡 A deed of variation can be used whether or not the deceased left a Will — it can also be used to vary the distribution under the Intestacy Rules.
Sources & references
- HMRC — Inheritance Tax
- Inheritance Tax Act 1984
- GOV.UK — Wills, probate and inheritance
- Citizens Advice — Death and Wills
Authoritative UK government, HMRC, statute and Citizens Advice sources. Last reviewed: 31 May 2026.
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