Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Inheritance Tax Manual

Instruments of Variation: introduction

In general law, a variation takes effect from the date of the instrument and if it gave rise to a loss to someone’s estate, there will be a transfer of value. But provided the instrument satisfies the conditions of IHTA84/S142, it will be treated for inheritance tax purposes as if the redirection of property that formed part of the deceased’s estate (IHTM04029) had been made by the deceased. Where this applies, the redirection of property is not a transfer of value, IHTA84/S17 (a).

In our view the word ‘disposition’ as used in IHTA84/S142 (1) refers

  • not to the content of the provision appearing in the will (or other relevant dispositive instrument or statute), but
  • to the result of applying that provision

so that the focus is on the post-death beneficial interest.

Accordingly the IoV must purport to change the destination of property in the estate from that prescribed by the disposition (however effected) which originally applied on the death to the property.