Deed of Variation: Changing a Will After Death

A deed of variation is a legal document that lets a beneficiary give up or redirect some or all of what they are due to inherit, and have that change treated as though the person who died had written it that way. In England and Wales, if it is made within two years of the date of death and contains the right statements, it can be "read back" for inheritance tax and capital gains tax, so the redirected gift is taxed as if it came from the deceased rather than from you. It is one of the most powerful and underused tools in estate planning, because it allows families to correct, improve or tax-efficiently restructure an inheritance after someone has died.

What is a deed of variation?

Also called a deed of family arrangement or an instrument of variation, a deed of variation is made by the beneficiary who is entitled to inherit, not by the executors and not by the deceased. If you are left £100,000 in a will but would prefer that money to go to your children, or to charity, or to a sibling, you can sign a deed directing it elsewhere. The key feature is the tax fiction: provided the legal conditions are met, the law pretends the gift was made by the deceased in their will, so it never counts as a gift from you.

This matters enormously. Without a deed of variation, simply giving away your inheritance would be a gift from you for inheritance tax purposes, starting a fresh seven-year clock and potentially exposing it to tax if you died within that period. The variation sidesteps that entirely. It also works for estates passing under the intestacy rules where there is no will at all.

The two-year rule and reading back

The single most important deadline is two years from the date of death. A variation executed within that window, with the correct declarations, is "read back" under section 142 of the Inheritance Tax Act 1984 for IHT and the equivalent provision for capital gains tax. After two years you can still rearrange who gets what by agreement, but the tax treatment changes completely: it becomes a gift from the original beneficiary, with its own seven-year clock and potential CGT on any gain since the date of death.

Reading back is not automatic. The deed must include an express statement that the beneficiaries intend the variation to take effect for inheritance tax (and, where relevant, capital gains tax) as if made by the deceased. Omitting or wording these statements badly is a common and expensive mistake, which is why this is rarely a do-it-yourself exercise.

The conditions you must meet

For a deed of variation to achieve read-back treatment, several conditions must all be satisfied:

• In writing and within two years of the date of death.
• Signed by every beneficiary giving something up. Anyone whose entitlement is reduced must consent; you cannot redirect another person's inheritance.
• Contains the relevant tax statements confirming the intention that it be read back for IHT and CGT.
• No extra consideration. The variation must not be made in exchange for money or anything of value from outside the estate. If you are effectively being paid to redirect your gift, read-back is lost.
• Not previously varied. The same asset cannot be varied twice for tax purposes.

Where a redirection would reduce the entitlement of a minor or a person who lacks mental capacity, you will normally need the approval of the court, because they cannot lawfully consent to give up their interest. This adds time and cost and should be planned for early.

Common reasons to vary an inheritance

People use deeds of variation for a mix of tax, family and practical reasons. The most frequent are below.

Skipping a generation

A common scenario: an adult child inherits from a parent but is already financially comfortable and has their own potential inheritance tax problem. Rather than receive the money, increase their own taxable estate and then have to survive seven years after gifting it on, they can vary their inheritance straight to their children. The gift is treated as coming from the grandparent, so it never enters the middle generation's estate at all. If you are considering passing wealth down two levels, our guide on whether you can leave money directly to your grandchildren explains the wider options.

Giving to charity

Redirecting part of an estate to a registered charity can do two things at once. The gift to charity is itself exempt from inheritance tax, and if the charitable legacy reaches 10% or more of the relevant part of the estate, the rate of inheritance tax on the rest of that estate falls from 40% to 36%. A well-judged variation can therefore increase the amount going to charity while reducing the tax bill on what is left for the family.

Equalising shares and fixing intestacy

Wills can become unfair over time, perhaps because one child received help during the deceased's lifetime, or because a will was never updated. A variation lets the family equalise shares by agreement. Variations are also the standard fix when someone dies intestate (without a will). The intestacy rules are rigid and exclude unmarried partners and stepchildren entirely, so families regularly use a deed of variation to provide for people the rules would otherwise leave with nothing.

The inheritance tax and CGT effect

Because the redirected gift is treated as the deceased's, the variation can change the inheritance tax position of the estate itself. A redirection to a spouse or civil partner becomes spouse-exempt; a redirection to charity attracts charity exemption; and a redirection into trust can move assets out of the survivor's estate for the future. You can also use a variation to capture reliefs and allowances more efficiently, for example by directing business or agricultural assets to make the best use of available Business Property Relief — bearing in mind that from 6 April 2026 the 100% rate of agricultural and business relief is limited to the first £1 million of combined qualifying property per person, with value above that getting 50% relief — or to ensure a couple's transferable nil-rate band and residence nil-rate band are not wasted.

For capital gains tax, read-back means the recipient takes the asset at its value at the date of death rather than at the date of the variation, avoiding a dry CGT charge on any increase in value during the administration period. If you are weighing a variation as part of a broader strategy, see our overview of how to reduce inheritance tax and the full UK inheritance tax guide.

Limits and pitfalls to watch

A deed of variation is powerful but not a cure-all. Watch for these traps:

• You cannot vary your own lifetime gifts — only entitlements arising from the death.
• The same property cannot be varied twice, so the first deed must be right.
• Redirecting into a relevant property trust can bring its own regime of charges: a potential 20% entry charge on value above the nil-rate band, a periodic charge of up to 6% every ten years, and exit charges when capital leaves. If the variation creates a discretionary or other relevant property trust, that trust's tax treatment applies going forward; our guide to discretionary trusts explains how those charges work.
• Means-tested benefits and care fees can be affected. Deliberately giving away an inheritance can be treated as deprivation of assets in some circumstances.
• Other people's interests. You can only give away what is yours, and a minor's share generally requires court approval.

Because the interaction between IHT, CGT, trusts and family circumstances is genuinely complex, and because read-back is lost if the deed is wrong, professional advice is strongly recommended before you sign anything.

How to make a deed of variation

In practice the steps are: confirm what you are entitled to and that you are within the two-year window; agree the change with anyone else affected; have the deed drafted with the correct IHT and CGT read-back statements; ensure everyone giving something up signs and the signatures are witnessed; and send the deed to HMRC only if it increases the tax due. There is no official form for the deed itself, though HMRC publishes a checklist that the wording should satisfy. Keep the executed deed safely with the estate papers.

A deed of variation gives families a rare second chance to get an inheritance right, redirecting wealth to where it is most needed and most tax-efficient, as if the deceased had planned it that way. Used well, and within the rules, it can save substantial tax and prevent years of family friction. Given the strict conditions and the one-shot nature of varying any given asset, it is worth getting tailored advice from a qualified estate planner before you act.