It is important to keep in mind that that the GWR rules are
fictitious treatments created only for the purposes of preventing
IHT avoidance. They do not affect the
actual devolution of the property in real life, so
the gifted property does not actually pass on death under the will
or intestacy, neither was any gift actually made at the time the
reservation ceased.
The gifted property passed to the actual donee at the time it
was actually made. Thus, any reliefs or exemptions (
IHTM11001) that may be available on
death, or that apply to PET's, such as spouse or civil partner
relief (
IHTM11032), charity relief or annual
exemptions, will
not apply to the transfer deemed to be made on
death, or deemed to be made when the reservation ceases.
