ARTICLE

Using a Deed of Variation to Facilitate Charitable Giving

As the Surrey Law Society’s nominated charity for 2025, the Community Foundation for Surrey plays a vital role in connecting local philanthropy with local need. In this special contribution, Dr Rebecca Bowden highlights how legal professionals can support clients in making a lasting impact through charitable giving using the Deed of Variation.

As legal professionals, you are often in a key position to support clients who wish to incorporate charitable giving into their estate planning—sometimes even after death. One underutilised but highly effective mechanism for doing so is the Deed of Variation.  

Case Study: Stonar Brighter Futures Fund 

Mike’s parents were long-time residents of Surrey with a strong commitment to volunteering and charitable giving. Although Mike now lives overseas, he retains a deep connection to his roots and an awareness that many children in Surrey today do not enjoy the same opportunities that he and his siblings had growing up.

With your guidance, a client like Mike can use a Deed of Variation to redirect part of their inheritance to create a charitable fund—turning a legacy into lasting community impact. In Mike’s case, he established the Stonar Brighter Futures Fund through the Community Foundation for Surrey, targeting support to disadvantaged young people under 25 in the county.

Legal Context: What is a Deed of Variation?

A Deed of Variation allows beneficiaries of an estate to alter the distribution of assets outlined in a will, provided it is executed within two years of the deceased’s death. This legal instrument enables the introduction of charitable gifts, often with the added benefit of Inheritance Tax (IHT) relief.

For example, if a beneficiary redirects 10% of the net estate to charity via a Deed of Variation, the estate may qualify for the reduced IHT rate of 36% (down from 40%). This can result in a charitable contribution worth up to four times the value of the sum foregone by the beneficiaries.

Professional Considerations

As an adviser, you play a pivotal role in helping clients explore their options:

• Client Objectives: What legacy do they wish to create? Do they want to stay involved in future grant making decisions?

• Tax Planning: How can charitable giving align with broader estate and tax planning strategies?

• Simplicity and Flexibility: A Deed of Variation provides a relatively straightforward way to support charitable aims without revisiting the will.

The Community Foundation for Surrey works with legal professionals to support clients throughout this process, ensuring that the gift reflects the values and intentions of both the deceased and the beneficiaries.

The Role of the Community Foundation

For clients wishing to remain involved, the Community Foundation can provide regular shortlists of vetted local projects that align with the fund’s purpose. In Mike’s case, he receives regular updates and chooses which projects to support, maintaining a meaningful connection to his family legacy.

Alternatively, clients may opt to delegate all grant making to the Foundation’s Board of Trustees. In this model, the fund operates as a fully managed vehicle, with annual impact reports provided—ideal for clients seeking a less hands-on approach, but who still want to see the ongoing impact of their donation.

Practical Impact: The Stonar Brighter Futures Fund

Since its inception, the Stonar Brighter Futures Fund has distributed over £50,000 in grants to local charities. Projects funded include construction skills training, residential and holiday camps, football programmes, and youth clubs—all benefiting young people across Surrey.

This approach demonstrates how a well-structured Deed of Variation can serve not only as a tax-efficient estate tool but as a way to create a living legacy that reflects a family's values and benefits the wider community. ■

by Dr Rebecca Bowden

Community Foundation for Surrey