IHT and Disclaiming an Inheritance UK: Refusing a Gift Under a Will or Intestacy (2026)
A disclaimer refuses a gift entirely — the disclaimant is treated as having predeceased the testator and the gift passes under existing will provisions. Unlike a deed of variation, a disclaimer cannot direct the gift to a named person. Within two years of death, a disclaimer has full IHT effect under s142 IHTA 1984 — the disclaimant is never treated as having made a transfer of value.
| Feature | Disclaimer | Deed of Variation |
|---|---|---|
| Can direct gift to named person? | No | Yes |
| Where does gift go? | Will's substitution clause / residue | Any person named by original beneficiary |
| IHT read-back (s142 IHTA) | Yes (within 2yr) | Yes (within 2yr) |
| CGT read-back (s62(6) TCGA) | Yes (within 2yr) | Yes (within 2yr) |
| SDLT on property? | Unlikely (no transfer from beneficiary) | Possible (treated as land transaction) |
| Must be in writing? | Advisable (required for land) | Yes — must be in writing |
| Can be made after acceptance? | No | Yes (but only before other dealings) |
Disclaiming an Inheritance: The Full IHT Picture
What is a disclaimer of inheritance?
A disclaimer is the formal refusal by a beneficiary to accept a benefit (gift, legacy, share of residue, or entitlement under intestacy) to which they are entitled. A disclaimer is not a gift from the beneficiary to anyone else — it is a refusal to take the benefit in the first place. The legal effect: the disclaimant is treated as if they had predeceased the testator (the person who made the will) for the purposes of the disclaimed gift. The gift then passes according to the terms of the will — typically under the substitution clause (e.g. 'if [beneficiary] predeceases me, to their children' or 'to the residue'). If there is no substitution clause, the gift falls into the residue; if there is no residue clause, it may fall on intestacy. A disclaimer must be total — you cannot partially disclaim a specific gift (though you can disclaim one gift while accepting another in the same will). Once you have accepted a benefit — including by dealing with assets (cashing a cheque, selling shares) — you cannot disclaim it.
IHT treatment of a disclaimer: section 142 IHTA 1984
For IHT, a disclaimer made within two years of the deceased's death (and not for consideration in money or money's worth) is treated under s142(1) IHTA 1984 as if the disclaimed property had never passed to the disclaimant. The IHT is calculated as if the will had always provided for the property to pass to the next recipient (whoever receives the property after the disclaimer). The critical IHT benefit: the disclaimant is never treated as having made a transfer of value. If the disclaimed property then passes to a surviving spouse (who would have received it under a substitution clause or residue), the spousal exemption applies on first death — reducing the IHT otherwise payable on the estate. Example: A leaves £100,000 to B, with a substitution clause in favour of B's spouse C. B disclaims. The £100,000 passes directly to C under the substitution clause. For IHT, B is treated as having predeceased A — the £100,000 passes directly from A to C (spousal exemption applies if C is A's surviving spouse). If B had instead accepted and then gifted £100,000 to C, that would be a PET by B — potentially taxable if B dies within seven years.
Disclaimer vs deed of variation: the key differences
A disclaimer and a deed of variation are both tools for post-death estate restructuring but work differently. Disclaimer: the beneficiary refuses the gift entirely; the gift passes according to the will's existing provisions (substitution clause or residue); the disclaimant cannot choose who receives the disclaimed property; no stamp duty land tax (SDLT) on property (because there is no transfer from the beneficiary); the disclaimer must be made before any acceptance of the gift. Deed of variation (DoV): the beneficiary accepts the gift and then redirects it to a named person (s142 IHTA 1984 / s62(6) TCGA 1992); the beneficiary chooses who receives the redirected gift; SDLT may apply if property is redirected (the DoV is treated as a land transaction from the estate to the new recipient); the DoV must be in writing, signed by the original beneficiary; must be within two years of death to have IHT and CGT effect; must include a statement that s142 IHTA 1984 is to apply. Which to use: use a disclaimer where the existing substitution provisions achieve the desired outcome without needing to specify a new recipient; use a DoV where you want to direct the gift to a specific person not named in the existing will provisions.
Disclaimer and CGT: section 62(6) TCGA 1992
For CGT purposes, a disclaimer within two years of death is treated under s62(6) TCGA 1992 as if the disclaimed property had passed directly to the next recipient — not to the disclaimant. There is no CGT disposal by the disclaimant (because they are treated as never having received the property). The next recipient acquires the property at its probate value (the value on the date of death — the CGT rebase under s62 TCGA 1992). This is the same treatment as a deed of variation: the DoV or disclaimer is not a CGT disposal for the original beneficiary, and the new recipient gets the CGT-rebased acquisition cost. The combination of the IHT and CGT treatment means that a disclaimer within two years can be powerful estate planning: it avoids IHT at the disclaimant's level and ensures the new recipient gets a CGT-rebased base cost.
How to make a valid disclaimer
A disclaimer must be: (1) In writing — while there is no statutory requirement for a disclaimer of personalty (cash, investments) to be in writing, a written disclaimer provides the necessary evidence for HMRC and creates certainty; for land and property, the disclaimer should be in a formal written document. (2) Unconditional — a disclaimer cannot be conditional (e.g. 'I disclaim provided X gets the money'); any condition makes the disclaimer ineffective. (3) Before acceptance — once the beneficiary has taken any action consistent with accepting the gift (signing for delivery, cashing a cheque, instructing a stockbroker), the right to disclaim is lost. (4) Within two years of death — for the disclaimer to have IHT and CGT effect under s142 IHTA 1984 and s62(6) TCGA 1992. A disclaimer made more than two years after death is still valid between the parties but has no IHT or CGT re-reading effect — it will be treated as a transfer from the disclaimant to the next recipient. (5) Not for consideration — if the disclaimant receives anything in exchange for the disclaimer (e.g. a payment from the beneficiary who receives the disclaimed gift), the s142 reading-back treatment does not apply and the disclaimer is taxed as a gift from the disclaimant.
When is a disclaimer useful for IHT planning?
Scenarios where a disclaimer provides IHT planning benefits: (1) Overfunded estate on second death: where a surviving spouse inherits everything from the first deceased and then dies with a large estate, the children (who are secondary beneficiaries) may find that disclaiming part of the survivor's estate — allowing it to pass to grandchildren — skips a generation of IHT. (2) NRB preservation on first death: where a will leaves everything to the surviving spouse (fully exempt), the NRB on first death is unused. Disclaimer by the spouse of a portion of the estate (up to the NRB amount) can allow that portion to pass to children on first death — using the NRB on the first death rather than relying solely on RNRB and transferred NRB on the second. (3) Intestacy restructuring: where a person dies intestate and the surviving spouse inherits more than planned, the spouse can disclaim part of the intestacy entitlement, allowing it to pass to children directly. (4) IHT-liable beneficiary disclaims to a charity: if the disclaimant's own estate is large and they would receive IHT-exposed assets, disclaiming in favour of a charity (via the will's substitution clause or residue) can both reduce the disclaimant's future IHT estate and reduce the overall estate rate if the residue charity gift achieves the 36% reduced rate under s36 IHTA 1984.
Frequently Asked Questions
What is a disclaimer of inheritance in the UK?
A disclaimer is a formal refusal by a beneficiary to accept a gift left in a will or under intestacy. The disclaimant is treated as having predeceased the testator — the gift passes under the will's substitution clause or falls into the residue. A disclaimer cannot direct the gift to a named person (unlike a deed of variation). A valid disclaimer within two years of death has IHT effect under s142 IHTA 1984 — the disclaimant is never treated as having made a transfer of value, and IHT is calculated as if the property passed directly from the deceased to the next recipient.
What is the difference between a disclaimer and a deed of variation?
A disclaimer refuses the gift entirely — it passes according to existing will provisions (substitution clause or residue); the disclaimant cannot direct it to a specific person. A deed of variation redirects the gift to a named person chosen by the original beneficiary. Both must be within two years of death for IHT and CGT effect under s142 IHTA 1984 and s62(6) TCGA 1992. SDLT may apply on a deed of variation redirecting property; less likely on a disclaimer (because there is no transfer from the beneficiary). Use a disclaimer where existing will provisions achieve the desired outcome; use a DoV where you need to specify a new recipient.
Can you partially disclaim an inheritance?
Generally no — a disclaimer of a specific gift must be total; you cannot disclaim half a legacy of £100,000 and accept the other half. However, you can disclaim one gift (e.g. a specific legacy) while accepting a separate gift (e.g. a share of residue) from the same will. You also cannot disclaim once you have accepted the gift — including by any action consistent with acceptance (cashing a cheque, selling an inherited asset, taking possession of property).
Does a disclaimer have to be in writing?
For cash and investments, there is no strict statutory requirement for a written disclaimer — but a written document is always advisable for evidence (HMRC and the estate's executor will need confirmation). For land and property, a written document is strongly recommended. The disclaimer must be before acceptance (before dealing with the asset in any way), unconditional, and not for consideration. For IHT effect under s142 IHTA 1984, the disclaimer must be within two years of death.
What happens if you disclaim more than two years after death?
A disclaimer made more than two years after death is still legally effective between the parties — the disclaimant genuinely refuses the gift. However, it does not have the s142 IHTA 1984 reading-back effect for IHT or the s62(6) TCGA 1992 effect for CGT. For IHT, the disclaimer will be treated as the disclaimant having received the asset and then making a gift to the next recipient — a PET (if to an individual) with the seven-year clock running from the date of the disclaimer, not the date of death.
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