When preparing a deed of variation in an Inheritance (Provision for Family and Dependents) Act 1975 claim, is it necessary to make an election within the deed for inheritance tax and capital gains tax purposes?

When settling an Inheritance (Provision for Family and Dependants) Act 1975 (I(PFD)A 1975) claim, it is important to consider any tax implications carefully.

A claim under I(PFD)A 1975 can be settled by deed of variation. If this is made within two years of death, and the other conditions set out in section 142 of the Inheritance Tax Act 1984 (IHTA 1984) are fulfilled, the deed will be 'read back' to the date of death. This requires the deed to include a statement that the parties intend IHTA 1984, s 142(1) to apply to the variation (this statement is sometimes known as an 'election'). The same is true for capital gains tax (CGT) (where the relevant provisions are section 62(6)–(9) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992)). So the short answer to the question