In the light of recent turmoil on the stockmarket, there would appear to be scope for charities to gain substantially from estates which include shares in companies that have declined dramatically in value (such as banks, builders and property companies).

Where there is a taxable estate which includes a shareholding which has fallen in value by more than 60% since death, and the deceased died more than one year ago (but less than two), why not suggest to the residuary beneficiaries that they consider completing a deed of variation, leaving the shares to a charity of their choice?

The charity benefits from a gift of shares it would not otherwise have received; the executors can recover 40% inheritance tax based upon the probate value of the shareholding; and the beneficiaries may receive more by way of tax reclaim than the current value of the shares gifted to charity.

There is nothing that would prevent the beneficiaries buying, in the open market, a replacement holding of shares if they so choose.

Before recommending a deed of variation, it would be prudent to check with the beneficiaries that they have no prospect of making chargeable gains on their own assets against which the losses on the shares could be offset.