Inheritance Tax Act 1984 section 218A

Instruments varying dispositions taking effect on death

Section 218A requires that where a deed of variation of a deceased person's estate results in additional inheritance tax being payable, the relevant persons must deliver a copy of the instrument and notify HMRC of the additional tax within six months.

• When beneficiaries vary the dispositions of a deceased person's estate using a deed of variation under section 142, and the variation increases the inheritance tax liability, there is a reporting obligation to HMRC.
• The relevant persons (typically the beneficiaries who made the variation) must deliver a copy of the instrument of variation to HMRC and notify them of the amount of additional tax within six months after the day on which the instrument is made.
• If any one of the relevant persons fulfils the reporting requirements, the remaining relevant persons are discharged from the obligation to do so themselves.
• Failure to deliver the instrument and notify HMRC within the six-month deadline can give rise to penalties under section 245A(1A) and (1B).