gifts with reservation

gifts with reservation

gifts in which the donee is not able to benefit from the gift to the exclusion of the donor as, for example, where a person gifts a house but then continues to live there without paying full market rent. Such assets are treated as still owned by the donor for INHERITANCE TAX until the reserved benefit ceases, at which point there is a potentially exempt transfer.
References in periodicals archive ?
When the legislation was originally drafted it stated that gifts with reservation (which become chargeable to IHT on death) are not part of any of the three components which are eligible for relief.
Cases which will fall within the gifts with reservation rules for Inheritance Tax.