The new legislation for this change will be backdated to apply to deaths on or after 6 April 2011.
There will also be an IHT exemption for compensation and ex-gratia payments to victims of persecution during the World War II era, applying to deaths on or after 1 January 2015.
In relation to deeds of variation, the Government also said that following the review announced in the March Budget 2015, it would not now introduce new restrictions on how deeds of variation can be used for tax purposes but continue to monitor their use.
Julie Hutchison, savings and tax expert at Standard Life said: “The decision not to introduce new restrictions on the tax consequences of using a deed of variation is good news. The majority of us don’t have Wills, and even if we do have a Will, we don’t keep it up to date. Against this background, it is extremely useful for loved ones to have the facility to alter how an estate is distributed within two years of date of death, without additional tax concerns.”
