Forms of post-death restructuring, primarily used to mitigate inheritance tax on the testator’s death, may include deeds of variation, disclaimers and ‘section 144’ two-year discretionary trusts. In essence, under these options an IHT (and CGT) fiction is created, i.e. back-dating to death is deemed to occur.

Deed of variation

For income tax purposes, however, the deed of variation creates no back-dating or tax fiction. The income tax effects therefore follow what happens in the real world.

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