Lifetime transfers: gifts with reservation (GWRs): devolution of GWR property
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 transferred. Thus, any exemptions (IHTM11001) that may be available on death, or that apply to potentially exempt transfers (PET’s), such as charity exemption or annual exemptions, will not apply to the transfer deemed to be made on death, or deemed to be made when the reservation ceases.