IHTM14025 - Investigating form IHT403: gifts with reservation

In general terms, a gift is one with reservation if

• the donee does not assume bona fide possession and enjoyment of the gifted property,

or

• the gifted property is not enjoyed to the entire exclusion, or virtually to the entire exclusion, of the donor and of any benefit to the donor by contract or otherwise.

Details of gifts with reservation ( IHTM04071) should be declared on page 3 of the form IHT403.

• You must check that all the information requested in the accompanying notes has been provided before referring the matter to TG.
• You can find full details about the requirements and identification of GWRs later in this section ( IHTM14301).
• If the information is not complete, obtain the necessary details from the taxpayer before referring the file for advice.

Sometimes the taxpayer or their agent may not consider a gift to be a gift with reservation and will erroneously complete the details of the transfer in part 1 of the form. Examine the whole form carefully and be aware of situations where a gift with reservation may arise, for example, where a deceased had given away their home but continued to live there rent free.