Q&A - If tax laws change before I die could my beneficiaries change my Will to reduce unexpected tax liabilities?

Q: I have been very careful in considering tax liability implications for the beneficiaries of my Will, but I’m concerned that if the law changes before I die my good intentions may be wasted. I am wondering therefore whether it would be possible for my beneficiaries, who are all close family members, to get together and change certain aspects of my Will to appease such liabilities if it becomes necessary?

A: Yes it is possible for beneficiaries to change a Will, provided that they all agree with the changes, they act within two years of your passing and none of the beneficiaries are left worse off. If there are any beneficiaries under the age of eighteen, however, it can be complicated.

Common reasons for beneficiaries wanting to change a Will after a person has died are: to reduce the Inheritance or Capital Gains tax liability, to provide for someone left out of a Will, to move the deceased person’s assets into a Trust, or to clear up uncertainty over a Will. A deed of variation can be drafted in order to ensure that all the legal requirements are met.

The ‘deed’ of variation does not need to be a formal document; a letter will suffice provided it meets certain conditions. You can use the Inland Revenue form IOV2 to work out whether you have met all the necessary legal requirements. If the variation results in a greater Inheritance Tax liability then a copy of it must be submitted to HMRC within six months of making it. You do not need to inform HMRC if the variation does not change the IHT liability.

All that said, a better solution to your dilemma would be to update your Will regularly so that your solicitor can make you aware of changes in tax implications that may affect your good intentions.

(Article published 01/05/2017)

Victoria Wilson

Victoria Wilson


A Partner and Head of our Probate, Wills, Trusts and Tax team