Deed of variation: the two-year limit, the section 142 statement and a deadline table for a firm's diary

A beneficiary says: "I do not need all of this. Can I pass £100,000 of it to my daughter?" They can, and the tax treatment depends on a short list of conditions in one section of an Act. The clock is the part most easily lost.

What the legislation says

Section 142 of the Inheritance Tax Act 1984, as published on legislation.gov.uk, sets these conditions:

• Time. The variation (or disclaimer) must be made within two years of the death.
• Form. It must be made by an instrument in writing by the people who benefit or would benefit under the estate.
• Statement. The instrument must contain a statement, made by all the relevant persons, that they intend the section to apply. Without it the section does not apply.
• Personal representatives. Where the variation causes extra tax to become payable, the personal representatives must join in the statement. They may decline only where there are no, or not enough, assets in the estate to pay that extra tax.
• No payment. The section does not apply to a variation made for money or money's worth, apart from a swap with another qualifying variation.
• Charities. Where property goes to a charity, the charity must have been notified of the instrument.
• Timing of administration. It makes no difference whether the estate is fully administered or the property already distributed.

Where the section applies, the change is treated, for inheritance tax, as if the person who died had made it.

The deadline table

The arithmetic is calendar days from 24 October 2026 to the second anniversary of the death.

Checks. 24 to 31 October is 7 days, plus 30 days of November to the 30th: 7 + 30 = 37. From 24 October 2026 to 14 March 2027: 7 (to 31 Oct) + 30 + 31 + 31 + 28 + 14 = 141 (February 2027 has 28 days). From 24 October 2026 to 24 October 2027 is 365 days, as no 29 February falls between them. For the last column, 30 November minus 14 days is 16 November; 14 March minus 14 days is 28 February; 24 October minus 14 days is 10 October.

The 14-day margin is a diary rule of the firm's, not a legal one. I did not read how the section counts the last day, so treat the anniversary itself as too late to rely on.

Why the statement matters

The statute makes the statement a condition, not a courtesy. A deed that redirects the money but leaves it out does not get the treatment in section 142. In practice that means one more line in the checklist before signing: the statement is there, it is signed by every person who makes the variation, and the personal representatives have joined where extra tax arises.

Putting it into practice

• Diary the date at the first meeting. The probate timeline and key dates shows where it sits among the other estate deadlines.
• Check the distribution date. The executors' distribution guide covers when money can safely move; the variation does not need to wait for it.
• Price the tax effect first. The charity rate example shows how a redirect to charity can change the rate on the rest.
• Remember the other tax. The gifts before death guide shows the seven-year clock that a late redirect would otherwise start.

What I did not read

I did not read the Capital Gains Tax election for variations, HMRC's guidance on reporting a variation, the rules on variations involving minors or people who lack capacity, or the Inheritance Tax rates and thresholds in force today. I did not read case law on the counting of the two years. Check each with a primary source before you advise.

Overlyft builds AI staff who join your firm's team, read the date of death from the file, work out the last safe signing date and draft the diary entry and the statement checklist, with a person approving each one.

This is general information, not legal advice. Check the current legislation and your own obligations for each client.