IHTM14301 - Gifts With Reservation: requirements for a GWR

As defined by FA86/S102 (1) and (2), there is a GWR when on or after 18 March 1986 an individual ( IHTM14312) disposes of any property by way of gift and either

• the donee does not assume bona fide possession and enjoyment of the property at or before the beginning of “the relevant period”

or

• at any time during “the relevant period” the gifted property is not enjoyed to the entire exclusion, or virtually to the entire exclusion, of the donor and of any benefit to him by contract or otherwise.

The relevant period being the time ending at the donor’s death and beginning

• seven years before the death,

or

• if later, the date of gift.

You can find an explanation of why the GWR rules are necessary ( IHTM04071) earlier in the manual.

When the GWR rules do not apply

The rules do not apply if

• the gift is an exempt transfer under most exemption provisions ( IHTM14318)
• the reservation is of an excluded type ( IHTM14340)

Considering GWR charges

You will need to consider the instructions for both

• the gift ( IHTM14311), and
• the reservation ( IHTM14331).

In more complicated situations you may also need to consider

• tracing ( IHTM14371) where the property is dealt with by the donee
• the implications for settled property ( IHTM14391), and
• policies ( IHTM14421)