Q&As

In a life interest trust where the life tenant has already disclaimed their life interest, is it possible for the life tenant and remainderman to enter into a deed of variation recording the fact that the life tenant is to take absolutely?

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Produced in partnership with Lynne Counsell of 9 Stone Buildings
Published on LexisPSL on 22/10/2018

The following Private Client Q&A produced in partnership with Lynne Counsell of 9 Stone Buildings provides comprehensive and up to date legal information covering:

  • In a life interest trust where the life tenant has already disclaimed their life interest, is it possible for the life tenant and remainderman to enter into a deed of variation recording the fact that the life tenant is to take absolutely?
  • Disclaimer by the life tenant
  • Deeds of variation
  • Taxation requirements
  • Consideration
  • Summary

Disclaimer by the life tenant

This Q&A envisages that the life tenant has already validly disclaimed their life interest. The consequences of a disclaimer are as follows:

  1. •

    the disclaimer must be absolute and the disclaiming beneficiary cannot retain any benefit. One gift can be disclaimed (eg a legacy) and another retained (eg a share in residue)

  2. •

    the disclaimed benefit falls back into residue and is distributed in accordance with the devolution of the estate

  3. •

    the disclaimer can subsequently be retracted provided no person has altered their position in reliance on the disclaimer

Generally, see Practice Note: Failure of gifts—disclaimer and acceptance.

Deeds of variation

Unlike a disclaimer, a deed of variation can redirect the beneficial interests under the trust. This is usually done for tax purposes aft

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