Post-death rearrangements

Question 1

what can a B who doesn’t want to inherit the property do? how are the possible actions different?

Answer 1

o Disclaim the property (cannot choose who inherits); or
o Redirect the property to another person (= variation)

Question 2

explain the benefit of s.142 IHT in this context

Answer 2

disclaiming/varying would normally give rise to IHT/CGT, but s.142 allows the transfer to be ‘read back’ as if D made the transfer (i.e. avoiding double taxation) if conditions are met

Question 3

what are the s.142 conditions?

Answer 3

o Disclaimer/variation must be in writing + inc. a statement that s.142 applies
o Within 2 years of death
o It cannot be for money or money’s worth

PRs will need to be party to the agreement if more tax is payable (i.e. if spouse/CP exemption would have applies (so no tax) but variation now means it will be taxed)