My Uncle has recently died and my elderly father inherited the entire estate of about £400,000 under the intestacy laws, as there was no Will. Can anything be done to divert the gift from my father to avoid this money forming part of his estate and attracting another large inheritance tax bill when he dies?
Yes, if your father is still of sound mind he can disclaim the gift from your Uncle by using a deed of variation. This can apply whether there was a Will or not. The deed must be drawn up and signed within two years of your Uncle’s death. It will not affect the inheritance tax (IHT) paid on your Uncle’s estate, (unless the money is diverted to charity) but it will avoid IHT arising on the same funds for a second time as part of your father’s estate.