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HMRC internal manual

Inheritance Tax Manual

Form IOV1: when a variation can be made

The published guidelines (IHTM35021) state that the variation must be made within two years of the death. The exact timing within that period is not critical and a variation may be made before the grant of representation is extracted. But

  • if a grant has been obtained, in effect, on credit by increasing the spouse or civil partner exemption (IHTM11032) before grant, and subsequently attempts are made to redistribute the spouse or civil partner exempt property, you should follow the instructions about variations in favour of the spouse or civil partner (IHTM35091),
  • if the grant has been obtained on the basis of a draft deed which the taxpayer fails to execute (or execute but fail to give a valid election), you should refer the case to TG
  • any acceptance that IHTA84/S142(1) applies to the IoV should be given with the express caveat that HMRC has no authority to dispense with a grant of representation.

A disposition can be varied after effect has been given to it or the estate has been completely administered. This is clear from IHTA84/S142 (6). So, for example, a legatee can vary a will by paying or transferring the subject matter of the legacy to another after he has received it or even after the estate has been finally wound up. It is because IHTA84/S142 (1) is capable or operating on ordinary gifts by legatees, and because those gifts need not involve the personal representatives (but might affect their tax bill) that the election (IHTM35051) and statement of intent (IHTM35028) provisions of IHTA84/S142 (2) are needed.

The beneficiaries of a person who has died (IHTM35042) may make a variation redirecting that person’s entitlement on an earlier death, provided it is made within two years following the earlier death.