Exclusions from exemption: interest reserved or created - land or buildings
Section IHTA84/S23 (4)(a) provides that a gift to charity (IHTM11112) is not exempt if
- the property given is land or a building, and
it is given subject to an interest reserved or created by the donor which enables:
- the donor,
- their spouse or civil partner (IHTM11032),or
- a person connected with them
to possess or occupy the land for less than a full arm’s length rent. Whether property is given subject to an interest must be established twelve months after the transfer.
A gift of land or a building will still be exempt if the reserved interest is:
- an interest of any kind at a full arm’s length rent, or
an interest rent-free or at less than a full arm’s length rent
- which is created in favour of a non-connected person (IHTM04164), or
- which (as with a right of way or other easement, or fishing or shooting rights) does not confer a right to possession or occupation of any of the property
You should discuss the case with Technical before pursuing any tax.