In most cases of property subject to a reservation the rate of
relief is determined by reference to the notional transfer by the
donee at the time of the GWR charge,
FA86/SCH20/para8 (1A) (b).
But in the case of shares or securities, where the date of
the GWR charge is on or after 17 March 1987, you should determine
whether the shares or securities are within IHTA84/S105 (1) (b),
(bb), or (cc), on the basis that they remained in the
donor's ownership.
The legislation applying from 17 March 1987 was designed to
correct a defect in the original paragraph 8 whereby the lower rate
of relief could apply notwithstanding that if the transfer had been
a potentially exempt transfer (
IHTM04057) it would have qualified for
the higher rate. The importance of that amending legislation has
been reduced by the further amending legislation in 1996, which
extended 100% relief to all qualifying unquoted shares.
