Redirecting Your Inheritance: Can You Regift It to Someone Else?

sarah ryan
Sarah RyanAccount Manager @ Lawhive & Non-Practising Solicitor
Updated on 26th June 2024
redirecting-your-inheritance

Inheritance can be a welcome surprise at a difficult time, giving you extra money and security. But sometimes, you might not want to keep all of it. There are many reasons why you might want to regift your inheritance. Maybe you think a family member or friend needs it more or you want to support a charity you care about.

Whatever the reason, knowing how to redirect your inheritance legally is important. 

In this article, we'll cover how to give your inheritance to someone else and the legal ways to go about it. We will also give you examples and tips to help you through the process so that, by the end, you will know your options and how to follow the rules. 

Table of Contents

What does redirecting your inheritance mean? 

Redirecting your inheritance means passing on the money or assets you receive from an inheritance to someone else. 

Common reasons for wanting to redirect an inheritance

  • A beneficiary who is financially stable might choose to redirect their inheritance to someone in greater need; 

  • Some beneficiaries may feel they don’t need or want the inheritance for personal or ethical reasons; 

  • A beneficiary might feel that the original distribution of the estate is unfair; 

  • A beneficiary might redirect their inheritance to prevent disputes or conflicts among family; 

  • A beneficiary may wish to support a charity by donating part or all of their inheritance. 

What are the options for regifting an inheritance? 

When considering how to redirect your inheritance, there are several options available. Common methods include: 

  1. Outright gifts to individuals

  2. Setting up a trust for the benefit of another

  3. Using a Deed of Variation

  4. Making charitable donations

  5. Disclaiming an inheritance. 

Outright gifts to individuals 

You can give part or all of your inherited assets directly to another person, such as a family member or friend.

Once you do this, you give up all rights and control over the assets. 

Setting up a trust for the benefit of another 

You can establish a trust to hold and manage assets on behalf of a beneficiary. There are different types of trusts, such as discretionary trusts and bare trusts. 

Trusts offer control over how and when the beneficiary receives assets, which can be particularly useful for minors or vulnerable individuals. 

Deed of Variation 

A Deed of Variation is a legal document that allows you to redirect all or part of your inheritance to someone else or a charity. 

Unlike disclaiming, using a Deed of Variation gives you control over who receives the inheritance instead of you.

How does a Deed of Variation work?

A Deed of Variation must be agreed upon by all beneficiaries who would be affected by the changes and it must be created and signed within two years of the date of death.

Once the Deed of Variation is in place, it is as if the will had always stated the new distribution terms.

Making charitable donations 

Inheritors can donate part or all of their inheritance to a registered charity. 

Disclaiming an inheritance

Disclaiming an inheritance means you refuse to accept what’s been left to you.

By disclaiming, you effectively say you do not want the money or assets, and it then passes to the next person entitled to it according to the will or intestacy rules. You have no control over who receives the inheritance next. 

To disclaim an inheritance you must: 

  1. Make a formal declaration in writing that you are disclaiming the inheritance; 

  2. Notify the executor of the estate or the probate court of your decision; 

Once you disclaim an inheritance, the decision is final. You can’t later change your mind and accept it, nor do you have a say in where the disclaimed inheritance goes. 

Furthermore, disclaiming an inheritance does not avoid inheritance tax. The tax liability remains on the estate before the assets are passed to the next beneficiary. 

Situations where disclaiming might be used 

There are certain situations where disclaiming might be used. For example if: 

  • Accepting the inheritance would push you into a higher tax bracket or affect your benefits entitlement; 

  • You feel that whoever the inheritance will pass to according to the will or intestacy rules would benefit more from the inheritance; 

  • The inheritance comes from a source you disagree with ethically or morally. 

Regardless of the reasons, disclaiming an inheritance is a significant decision with lasting consequences. Therefore, it’s important to understand the potential impacts of doing so. Consulting with a wills, trust, and probate lawyer can provide guidance in these situations relevant to your specific situation. 

Accepting and gifting vs direct redirection of inheritance 

If you choose to accept your inheritance and then gift it to someone else you have full control over the assets and can choose who receives them and when. 

If you choose to redirect the inheritance using a deed of variation or by disclaiming it, you do not take ownership of the inheritance.

This means you do not have to deal with gift laws or additional tax liabilities associated with later transfers, such as the seven-year rule for inheritance tax or capital gains tax. 

Generally, directly redirecting inheritance is a simpler process as you do not have to go through the complexities of transferring assets after accepting them. However, which method is appropriate for you depends on your specific circumstances.

Therefore, it is advisable to seek legal advice to understand the best approach for you. 

Are there any tax benefits for redirecting inheritance? 

Redirecting your inheritance can sometimes offer tax benefits. However, this requires careful planning and understanding of the law.

Below are some examples of potentially tax-efficient redirection. 

Discretionary trusts 

By placing your inheritance into a discretionary trust, you can control how and when beneficiaries receive the assets.

Trusts like this can be particularly useful for protecting assets from immediate taxation and for providing for minors or vulnerable beneficiaries as assets in discretionary trusts are not immediately taxed as part of the beneficiary’s estate. 

Bare trusts 

A bare trust holds assets for a specific beneficiary who has an absolute right to them. These are often used for young beneficiaries. 

While the assets are held in the trust, they are not part of the beneficiary’s estate for inheritance tax purposes until they receive them. 

Charitable donations 

Donating part or all of your inheritance to a registered charity can significantly reduce the inheritance tax liability of the estate. 

Gifts to charities are exempt from inheritance tax. Additionally, if 10% or more of the estate is left to charity, the inheritance tax rate on the remaining estate can be reduced from 40% to 36%. 

Charitable trusts 

Setting up a charitable trust can allow you to donate assets while retaining some control over how they are used. Similar to direct charitable donations, assets placed in charitable trusts are exempt from inheritance tax. 

Risks and potential pitfalls

Trusts and other legal structures can be complex and require careful planning and administration. If you don’t follow the law in setting these up, it can result in unintended tax consequences and potential legal actions. 

Further, misunderstanding how different taxes apply can lead to unexpected liabilities. For example, capital gains tax may apply if assets are transferred and have appreciated since the inheritance was received. 

In a similar vein, gifts made during your lifetime may still be subject to inheritance tax if you pass away within seven years of making the gift. That means large gifts intended to reduce the taxable estate may not achieve the desired tax benefits if the donor does not survive the seven-year period. 

Can you redirect an inheritance before probate is granted?

You can’t redirect an inheritance before probate is granted because the executor lacks the legal authority to distribute or alter the estate’s assets until probate is complete.

Once probate is granted, however, the executor can go ahead with the distribution of the estate and beneficiaries can consider options such as a Deed of Variation to redirect their inheritance. 

Does a Deed of Variation avoid inheritance tax?

A Deed of Variation does not “avoid” inheritance tax outright.

However, it can be used in some circumstances to reduce the overall tax liability of the estate.

For example, by redirecting part of an inheritance to exempt beneficiaries (like a spouse or registered charity) it is possible to lower the taxable value of the estate and reduce the amount of inheritance tax payable. 

What happens if multiple beneficiaries disagree on redirecting inheritance?


For a Deed of Variation to be valid, all beneficiaries must provide written consent to the proposed changes. If even one beneficiary disagrees, the variation can’t go ahead. 

Beneficiaries may try to negotiate among themselves to reach a consensus. Or, if complete agreement on a full Deed of Variation is not possible, it might be feasible to implement partial variations, which involve only those beneficiaries who agree to the changes making alterations to their portions of the inheritance. 

In extreme cases, it may be necessary to seek a court ruling to provide a definitive resolution, but this route can be time-consuming, costly, and may also strain family relationships. 

However, if no agreement can be reached, no changes will be made and each beneficiary will receive their share as initially intended by the deceased or the rules of intestacy. 

Can a minor's inheritance be redirected?

Any significant decisions involving a minor’s inheritance require court approval to ensure that the minor’s best interests are protected. 

Trustees or legal guardians can apply to the court for permission and the court will decide whether the redirection benefits the minor in the long term. 

If you want to redirect or regift your inheritance before the estate is fully administered, you will need the executor’s involvement, but not necessarily their consent.

For example, for a Deed of Variation, the executor must be informed and involved because they handle the estate’s administration and any necessary adjustments to the distribution. 

However, after the executor has completed the administration and distributed the inheritance, you can regift your share independently as you have legal ownership of the inheritance and therefore can decide how to use or dispose of it.  

Transferring inherited assets involves several legal documents to ensure the process is conducted lawfully and smoothly, this includes: 

  • Grant of Probate or Letters of Administration

  • Inheritance Tax forms

  • Official death certificate

  • Deed of Variation (if applicable) 

  • Beneficiary agreement forms

  • Trust documents.

Other documents which may be required depend on the assets themselves. For example, for property ownership transfers, the Land Registry requires specific forms including TR1 and ID1 forms. 

How does regifting affect my rights as a beneficiary?

When you redirect your inheritance, you transfer ownership and control of the assets to the new recipient.

This means you no longer have any legal rights or claims to the assets you have gifted. So you can’t take it back unless the recipient agrees and legally returns the gift. 

What are the potential risks of redirecting an inheritance? 

Disputes

Regifting or redirecting an inheritance can often lead to disputes among beneficiaries, who may feel they aren’t getting their fair share or are left out of the decision-making process. 

The best way to avoid this is to openly discuss your intentions with all beneficiaries before making any decisions and make sure everyone understands the reasons behind your choices. 

If the regifting process does not comply with legal requirements, it can be challenged in court and may be considered invalid. 

To prevent this from happening, consult with a solicitor in the first instance. They can assist in executing and filing the appropriate legal documents and provide advice on how best to follow the will’s terms and comply with the law given the circumstances. 

Tax complications 

Gifts made within seven years of the giver’s death may be subject to inheritance tax. Depending on your age and health, it’s important to understand this rule when considering regifting an inheritance to someone else.

Further, if gifted assets have appreciated, the recipient may have to pay capital gains tax on their eventual sale. 

How can Lawhive help with redirecting an inheritance? 

Redirecting or regifting an inheritance is a significant decision with far-reaching consequences. While it offers various benefits, there are challenges to consider that a specialist lawyer can help you with.

At Lawhive, our network of experienced legal professionals is on hand to advise on redirecting an inheritance for a fraction of the cost of a high-street Lawhive, providing personalised advice and support to help you make informed decisions. 

Contact us today to find out more and get a free, no-obligation, fixed-fee quote for the services of a specialist lawyer. 

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