Deed of Variation

[DamoUK]

My uncle died without signing his will and so everything passed to his sister. She wrote a deed of variation to essentially redirect the estate as he had intended, and she asked me to be the executor as he had originally requested.

I’ve now got letters of administration, and settled most of the estate, just a house sale to complete and a few items to be sold before I will call it completed so I can distribute to the beneficiaries. With COVID lockdowns it’s taken almost 2 years to get this far!

I believe that, when everything is resolved normally, the beneficiaries should have copies of the estate accounts.

i cannot find any information as to who should see those when a deed of variation is in place - is it just his sister that needs to see those as she wrote the deed, or does every beneficiary need copies? Or am I completely mistaken on this requirement?

[des8]

So essentially your uncle died intestate, and his sister would have inherited the entire estate if she had not signed a deed of variation.
The deed just varies what the laws of intestacy stipulate, and is treated as being part of the original

Beneficiaries have the right to request a copy of the account which relates to their legacy.
Residuary beneficiaries may request a copy of the final accounts.

The administrator only has to provide such copies when requested, but it is good practice to at least obtain approval of residuary beneficiaries to the accounts.

[DamoUK]

it is good practice to at least obtain approval of residuary beneficiaries to the accounts.

thank you so much, that’s all very clear, except What does this line actually mean?

[des8]

It means that it is advisable to ask the residuary beneficiaries to agree the final accounts when you make the distribution.
This gives a certain amount of protection to the executor if queries are later raised about the handling of the estate

[DamoUK]

Ok thank you that’s superb. One more question sort of related if you don’t mind?

The value of the estate was done during the height of the first lockdown when it was impossible to get anyone to go and properly value the estate or contents (its in Wales, I’m in England, and a 6 hour drive away - at the time the border to Wales was also closed for non essential travel), so it was all done “desktop” by a few people to progress probate. I’ve now cleared the property and found some valuable items unknown to be there before and so is missing from probate valuation, also the house has sold for £50k more than valued (sale hasn’t completed yet, but that’s the agreed sum) - mostly that increase is a result of the price increase since the pandemic, but could be partially down to it being undervalued as it was done “desktop”.
Where do I stand with this? I don’t want to end up personally liable for a large tax bill or have problems from HMRC

[des8]

Suggest you ask HMRC

Following lifted from "https://www.w-w.co.uk/blog/probate-valuations-the-fundamentals"

The property will be valued as at date of death and the statutory definition of market value is:

‘‘The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.’

If the property is sold quickly after that Grant of Probate and the sale price is more than the figure submitted for Probate, HMRC may try to substitute the sale price instead of the probate value and recalculate the IHT liability. This can be challenged and negotiated with the District Valuer if necessary. On the other hand, HMRC may view the increase to be a gain and thus Capital Gains Tax may be payable.

[DamoUK]

Thank you again