Q: My widowed mother recently died, leaving her house between me and my two sisters and £40,000 in savings and investments to be shared equally between her six grandchildren. The house has been valued at £225,000 and my daughter would like to buy it. My sisters are happy with that but my daughter would need help to raise a deposit for a mortgage. Could I give my share of the house to her as a deposit? And could the house be signed over to her directly or would it have to be transferred in my name and that of my siblings?
A: A Deed of Variation would enable you to pass your share to your daughter. This would take effect as though your mother's Will had originally stated your daughter will inherit, rather than you. This must be done within two years of the date of death.
The most straightforward way to transfer the property to your daughter is to do so at the time she completes the mortgage, which will enable your sisters to be bought out. If the transaction is completed in this way there will be no adverse inheritance tax consequences for you provided the Deed of Variation is signed within the said two year period.
The Deed of Variation takes effect as though your late mother had written a Will in those terms. It is a useful mechanism in cases where beneficiaries, for one reason or another, do not wish to inherit a legacy left to them in a Will. It also has the advantage of varying an asset you would otherwise have been deemed to own for Capital Gains Tax and Inheritance Tax purposes.
A suitably qualified solicitor who practises in the area of private client work will be able to advise you about the provision of a Deed of Variation.