A UK citizen who is UK-domiciled but tax resident abroad receives a bequest under a will written in England by a UK citizen who is resident in England. Can that beneficiary write a Deed of Variation subject to the law of England and Wales? His purpose is to divert the bequest to his minor children (with an eventual view to paying for education) who live abroad with him.
If the DoV diverted the bequest to bare trusts for the children would those trusts be English Trusts (assuming the trustees are UK resident)?
Got a credit card? use our Credit Card & Finance Calculators
Thanks to DrFfybes,smokey01,bungeejumper,stockton,Anonymous, for Donating to support the site
deed of variation
-
- Lemon Slice
- Posts: 366
- Joined: November 5th, 2016, 4:02 pm
- Has thanked: 26 times
- Been thanked: 113 times
-
- Lemon Quarter
- Posts: 2903
- Joined: November 6th, 2016, 9:58 pm
- Has thanked: 1417 times
- Been thanked: 3846 times
Re: deed of variation
Why doesn't the beneficiary simply give the money to his children? If he's tax resident abroad then it presumably wouldn't count as a Potentially Exempt Transfer, which is the only reason not do so in most cases.
-
- Lemon Half
- Posts: 8695
- Joined: November 8th, 2016, 5:56 am
- Has thanked: 4603 times
- Been thanked: 3725 times
Re: deed of variation
Clitheroekid wrote:Why doesn't the beneficiary simply give the money to his children? If he's tax resident abroad then it presumably wouldn't count as a Potentially Exempt Transfer, which is the only reason not do so in most cases.
I believe there are places (Germany, some US States etc) that levy an inheritance tax as a beneficiary, rather than on the estate, on residents; without known precisely where the citizen is resident it's hard to know what action might be best.
I guess the question of whether a deed of variation subject to English law can be written by someone resident elsewhere might be addressed without knowing if it is worthwhile?
-
- Lemon Quarter
- Posts: 4987
- Joined: November 4th, 2016, 10:15 am
- Has thanked: 654 times
- Been thanked: 2784 times
Re: deed of variation
On the face of it, I can't see why the DOV can't be written by a non UK resident. It simply varies that person's entitlement under the Will in favour of someone else. As long as there are no IHT consequences, the Revenue does not even need to be informed, as I understand it.
Some countries don't recognise the existence of a trust (eg Denmark). Anyway a bare trust is usually simply a mechanism whereby investments are registered with an adult as nominee because minors cannot be registered owners. It has no tax consequences and in this country nothing needed to be registered about a bare trust until the wretched Trust Registration System was recently introduced. A bare trust does not even need a trust deed. It is deemed to exist if investments are held by someone as nominee for a minor.
I guess this really does all depend on where those involved are tax resident.
Some countries don't recognise the existence of a trust (eg Denmark). Anyway a bare trust is usually simply a mechanism whereby investments are registered with an adult as nominee because minors cannot be registered owners. It has no tax consequences and in this country nothing needed to be registered about a bare trust until the wretched Trust Registration System was recently introduced. A bare trust does not even need a trust deed. It is deemed to exist if investments are held by someone as nominee for a minor.
I guess this really does all depend on where those involved are tax resident.
Return to “Legal Issues (Practical)”
Who is online
Users browsing this forum: No registered users and 52 guests