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HMRC internal manual

Capital Gains Manual

Separate settlements: variations of trusts: instrument of variation of will or intestacy

It is quite common for instruments of variation of wills or intestacies to be executedwithin two years of the testator’s (or intestate’s) death. In England & Wales theusual form of the instrument is a deed. The general guidance is at IHTM35011+ and guidanceon CGT at CG31600+. If an instrument of variation creates a continuing trust whichreplaces absolute interests in the original will, and there is no statement of intent inthe deed or before 1 August 2002 no election, under TCGA92/S62 (7), or its predecessorCGTA79/S49 (7), the person who gives up the absolute interest in favour of the trustees isto be regarded as the settlor for the purposes of the annual exempt amount and TCGA92/S77.His personal position is considered at CG32000+, assuming the variation is gratuitous.