IHTM24203 - Gifts with reservation of benefit: Qualifying conditions for shares and securities

Shares and securities in a company charged under the GWR ( IHTM04091) rules have to satisfy three conditions to qualify for agricultural relief

• at the time of the gift with reservation of the shares or securities the value transferred ( IHTM04028) by the gift has to qualify for either business or agricultural relief ( IHTM24204).
• the donee must retain ownership of the shares throughout the period between the date of gift and the date of the GWR charge, FA86/SCH20/para8 (3)(b).
• at the time of the GWR charge the shares or securities must qualify for relief on the basis of a notional transfer of value by the donee, FA86/SCH20/para8 (1A)(b) ( IHTM24205).

Before you attempt to establish whether agricultural relief is due on the notional transfer at the time of the GWR charge you should consider the interaction with business relief ( IHTM24204). The notional transfer by the donee determines the rate of relief.