A deed of variation lets you change who inherits from a UK will (or intestate estate) after the death — provided all the affected beneficiaries agree. It's one of the most useful and least understood tools in UK estate planning. Common uses include redirecting an inheritance to a child or charity for inheritance tax efficiency, supporting a less-well-off relative, or correcting an unintended consequence of an older will. This guide explains what a deed of variation is, the conditions for it to work, the tax effects, and the deadlines.
Key takeaways:
- A deed of variation lets beneficiaries redirect their inheritance to other people after the testator has died.
- All beneficiaries whose entitlement is reduced must agree in writing to the variation.
- The variation must be made within 2 years of death and contain specific statements to achieve the IHT and CGT "read-back" treatment.
- Properly done, the variation is treated for tax purposes as if the testator had made the gift directly — so it can reduce inheritance tax.
- Deeds of variation cannot create a gift to anyone who is not already a beneficiary of the original will or intestacy... unless someone who IS a beneficiary chooses to redirect their share to that person.
What a deed of variation actually does
When someone dies, the will (or intestacy rules) determines who inherits. Once those entitlements are fixed, the beneficiaries themselves can choose to redirect their inheritance — and a deed of variation is the formal document that does it.
Example: Your father dies and leaves you £200,000 from a £600,000 estate. You don't need the money, but your sister (also a beneficiary) is struggling financially. You sign a deed of variation directing £100,000 of your inheritance to your sister. For tax purposes, the variation is treated as if your father had left her the £100,000 directly — even though he didn't.
The mechanism is set out in Section 142 of the Inheritance Tax Act 1984 and Section 62 of the Taxation of Chargeable Gains Act 1992. Done correctly, the variation has the same tax effect as if the original will had made the gift.
What you can do with a deed of variation
The variation can do almost anything that could have been done in the original will:
- Redirect a specific gift (your £50,000 cash gift goes to your nephew instead)
- Redirect a share of the residue (your one-third becomes one-sixth to you and one-sixth to a charity)
- Add a beneficiary by redirecting from an existing beneficiary (you give half your inheritance to a friend who wasn't in the will)
- Create a trust out of an inheritance (your share is held in trust for your minor children)
- Vary intestacy if the deceased died without a will (close relatives can redirect the intestacy distribution)
- Disclaim an inheritance entirely (you formally refuse the gift; it falls back into the residue)
- Adjust to claim reliefs (e.g. redirecting more to charity to trigger the 10% reduced IHT rate)
The strict conditions
For the variation to achieve the "read-back" tax treatment under section 142:
### 1. Must be in writing
A signed deed (or a signed instrument equivalent to a deed).
### 2. Made within 2 years of death
The 2-year clock starts from the date of death and cannot be extended. After 2 years, you can still make the redirection — but it will be treated as a gift from you, not from the deceased, with no IHT read-back.
### 3. Signed by all affected beneficiaries
Everyone whose inheritance is reduced by the variation must sign. Beneficiaries who gain don't need to sign (but their consent is usually evidenced).
### 4. Must contain the statutory statements
For IHT read-back: a statement that section 142(2) IHTA 1984 is to apply.
For CGT read-back: a statement that section 62(6) TCGA 1992 is to apply.
Without these statements, the variation works as a redirection but doesn't get the favourable tax treatment — the redirection is treated as a gift from the original beneficiary to the new one, with potential IHT and CGT consequences.
### 5. Not for consideration
The variation must be voluntary. If money or assets change hands as consideration for the variation, the tax read-back is lost.
### 6. HMRC notified (in some cases)
If the variation results in more IHT being due, the executors must notify HMRC within 6 months. If less or the same IHT, no notification is required.
Common reasons to vary
### To reduce inheritance tax
The classic IHT use: redirecting some of the inheritance to a charity to reduce the IHT rate on the rest (the 10% reduced rate, dropping the IHT rate from 40% to 36% — see charity gifts guide).
Or redirecting from a beneficiary who would themselves face IHT on their death (e.g. a wealthy adult child) to a beneficiary who wouldn't (e.g. a grandchild). Skips a generation of IHT.
### To support a less-well-off relative
A beneficiary who doesn't need their full inheritance can redirect part to a family member who does — without it counting as a gift from them.
### To correct an old will
An out-of-date will may not reflect the current family situation (new grandchildren, divorces, changed relationships). Beneficiaries can adjust the distribution to match what the deceased would likely have wanted.
### To unwind intestacy issues
Where the deceased had no will and the intestacy rules produce an unintended result (e.g. an unmarried partner inheriting nothing), the beneficiaries can redirect their inheritance to that partner.
### To use unused IHT allowances
If a beneficiary is going to die soon (terminal illness), they might disclaim or redirect to avoid the inheritance being immediately re-taxed on their own death.
### To set up trusts
A beneficiary can use a variation to put their inheritance into a trust for their children rather than receiving it outright.
What it cannot do
- Cannot revive a void will — if the original will was invalid, the variation operates on the intestacy result, not on the would-have-been will
- Cannot bind beneficiaries who don't agree — every affected party must sign voluntarily
- Cannot avoid CGT triggered by the variation unless the section 62 statement is included
- Cannot avoid Income Tax on the new beneficiary's future income from the redirected assets — read-back is only for IHT and CGT
- Cannot extend beyond 2 years — the deadline is absolute
Trusted Hands wills are designed to be clear and current — the right defence against ever needing a deed of variation. Annual Subscription with Family Vault lets you keep your will updated as life changes, so beneficiaries don't have to fix it after you're gone. Start your will →
Practical process
Typical steps:
- All affected beneficiaries agree informally what the variation should achieve.
- A solicitor drafts the deed — strongly recommended. The drafting must be precise to achieve the intended tax effect. Cost: typically £300-£800 for a straightforward variation.
- All affected beneficiaries sign the deed (signatures witnessed where required).
- The executors are notified and adjust the estate distribution accordingly.
- HMRC is notified if the variation increases the IHT bill (within 6 months of the variation).
- The variation is filed with the estate records (12+ year retention).
Frequently asked questions
Can a beneficiary be forced to sign a variation?
No. Every signatory must agree voluntarily. A reluctant beneficiary effectively has a veto over any variation that would reduce their share.
Does a deed of variation need to be witnessed?
A formal deed needs to be witnessed if signed by an individual (the witness signs alongside). Standard practice. Section 142 doesn't strictly require a deed format — a signed written instrument can suffice — but a witnessed deed is the safest form.
Can I vary part of my inheritance and keep the rest?
Yes. You can vary any part of your entitlement without varying the rest.
What if I'm a minor or under 18?
A minor cannot sign a deed of variation. The court can approve a variation on behalf of a minor in limited circumstances, but the process is complex and may not achieve the desired tax effect. Take advice.
Can I redirect to a beneficiary who isn't in the will at all?
Yes — provided your own entitlement under the will is the source. You're effectively giving away your inheritance. The new beneficiary doesn't need to have been named in the original will.
What if all beneficiaries can't be located?
The variation cannot proceed without all affected signatures. Missing beneficiaries must be found before the 2-year deadline (or the variation falls away).
Does a deed of variation become a public document?
No. Unlike the will, the deed of variation is private and is not filed with the Probate Registry. It's kept with the estate records.
Can I vary an intestate estate?
Yes. The same section 142 mechanism applies — the close relatives entitled under intestacy can vary the distribution by deed.
Are deeds of variation only for tax planning?
No. Many variations are for non-tax reasons: family fairness, supporting a relative in need, setting up a trust for minor beneficiaries. Tax efficiency is one common use, not the only one.
What if there's no IHT due — does a deed of variation still work?
Yes, for non-tax purposes. The IHT read-back is irrelevant for an estate below the threshold. CGT read-back may still matter if assets are being redistributed at different values.
Trusted Hands is a UK will-writing service, not a firm of solicitors and not a tax adviser. Deeds of variation require precise drafting to achieve the intended tax treatment; we strongly recommend a regulated solicitor for any variation involving meaningful sums.
Update your will so it stays right while you're alive
A deed of variation fixes a will after the testator dies. A current will is much better.
- From £49 for a single will
- Annual Subscription with Family Vault for unlimited updates
- Smart Will Engine flags scenarios where reviewing is overdue
- Free Executor Pack with every will