Q&As

The beneficiary of an intestate estate (sibling of deceased) enters into a deed of variation establishing two individual legacies of £200,000 to each of their two grandchildren ‘to be upon trust until xx shall attain the age of 21 and thereafter absolutely’ with a declaration that the gift shall carry the intermediate income to be paid free of trust. STEP provisions are included. Are there any tax implications on advancing the legacy out ahead of the beneficiary turning 21? Would this be classified as an immediate post-death interest as it carries the intermediate income?

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Published by a ³ÉÈËÓ°Òô Private Client expert
Published on: 26 May 2023
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This Q&A assumes that the deed of variation qualifies for the special inheritance tax treatment in section 142 of the Inheritance Tax Act 1984 and qualifies for the special capital gains tax treatment in section 62(6) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992).

As a result of the declaration in the deed of variation that the contingent interests of the grandchildren will carry the intermediate income, section 31 of the Trustee Act 1925 (TA 1925) will apply (see TA 1925, s 31(3)).

Subject to

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United Kingdom
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