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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: gifts with reservation (GWRs): the gift: the donor

You need to identify the individual who made the gift. That individual is the donor. It is only by reference to their death that the GWR provisions can operate.

The donor has to be an individual. Gifts made by persons who are not individuals (such as companies) are not within the scope of the gift with reservation (GWR) provisions. Settled property is covered later in this section. (IHTM14391)

Instruments of variation

The GWR provisions cannot apply to a disposition which is a variation within IHTA84/S142. The variation is treated as having been made by the deceased person whose estate is the subject of the variation, not the persons entitled under his Will and this treatment applies for all IHT purposes.


Alvin died in 1999. By will, his whole estate passed to his widow Sophie, absolutely.

In 2000 Sophie made an Instrument of Variation (IOV) (IHTM35011) settling half Alvin’s estate on discretionary trusts under which she and her children are potential beneficiaries. The IOV is accepted as within IHTA84/S142(1).

In 2002 Sophie dies. She is still a potential beneficiary of the trust until her death.

The variation is treated for the purposes of the IHT legislation as having been made by Alvin. So Alvin is the donor for the purposes of FA86/S102 and no GWR claim arises on the death of the widow.