Another Inheritance One…

[Flyflyfly]

Right then, I’m turning to the ever wise people of mumsnet to assist here!

My grandparents died earlier this year and have left inheritance which my parents want to pass onto us in the form of cash. The estate wasn’t subject to inheritance tax.

all I can find online is that they can give us around £3500 a year, otherwise we will be eligible to pay tax on anything above this.

My parents seem to think that if we put a clause into my grandparents will then they be able to give us more, but I cannot find anything anywhere about this…..

Hope you wise people can assist!

Is there some kind of deed of variation that can be made on the will, so the money essentially becomes your inheritance?

They are talking about doing a variation of the will - if all beneficiaries agree they can change the will…

so if they got (say) 100k they could do a variation to give you some/all of it and it would be as if that’s what the will said in the first place. But ALL beneficiaries have to agree.

I’m not sure how you put a clause in a will that’s already been written and executed, but I am not a lawyer.
You can do a deed of variation to pass an inheritance you are getting to someone else but it sounds like it may be too late for that. They can gift you money each year without it being subject to IHT when they pass, I think it’s £3000 but I dint know what your tax position would be on that. As a gift it’s probably tax free to you.
As I said I’m not a lawyer so get proper advice but I think there’s some confusion here

www.irwinmitchell.com/personal/probate/probate-guide/changing-will-after-death#:~:text=A%20deed%20of%20variation%2C%20sometimes,to%20go%20to%20someone%20else.

Thank you, that’s very helpful :)

It’s not true that all beneficiaries have to agree. Each beneficiary can decide what happens to their own share. (So say your mum inherited 50% and someone else inherited 50%, your mum could vary the will in respect of her share without the agreement of the other person, but obviously not the other person’s share.)

As @DorotheaDiamond says a deed of variation can be made to the will enabling any of the existing beneficiaries to allocate some or all of their inheritance to one or more others. But only if all current beneficiaries agree and it has to be done within 2 years of the date of death of last grandparent. It's actually very straightforward if all parties are in agreement.

Sorry I was wrong on the agreement of beneficiaries @HelloAvocado

As the posters above say, you can do a deed of variation within 2 years and then the amounts will be exempt from inheritance tax entirely.
Even if the deed of varoation isn't done, inheritance tax would only be payable if your parent who gave the money to you died within 7 years of the gift and their total estate was worth more than the inheritance tax threshold

Thank you, that’s all really helpful

@Flyflyfly I agree with pp about a Deed of Variation.

There is an incorrect assumption in your initial post. Your parents can gift you as much money as they want. However there are a number of considerations:

• if they gift more than £3,000 a year and die within 7 years this money is included when calculating if their estate has an inheritance tax liability. Inheritance tax is paid by the estate. It is slightly more complex than that but the basic premise is inheritance tax is paid before you receive an inheritance. If your parents live for more than 7 years there is no inheritance tax implication.
• should your parents need social care, the gift can be viewed as deprivation of assets. There is no time limit on how far back a local authority can go. If your parents have adequate funds now there would be no issue.