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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: gifts with reservation (GWRs): the reservation: exclusion of the donor

The gift with reservation (GWR) rules require the gifted property to be enjoyed

  • to the entire exclusion, or virtually to the entire exclusion, of the donor,
  • to the entire exclusion, or virtually to the entire exclusion, of any benefit to the donor by contract or otherwise.

These rules therefore have two conditions, which must both be satisfied. It is a question of fact whether the donor was excluded. If they were not, this condition is not satisfied even though the benefits enjoyed were not enforceable.

Benefit referable to the gift

The benefit must be referable to the gift, although it need not issue from the gifted property itself. See Example 3 at IHTM14334.


The word ‘virtually’ is not defined but means ‘to all intents’ or ‘as good as’.

It is intended to take out of the GWR regime gifts where the benefit obtained by the donor is insignificant in relation to the gifted property. An example would be where the donor had given a valuable painting to her son and enjoyed it on short visits to the donee’s house.

Some examples of situations in which we consider that FA86/S102(1)(b) permits limited benefit to the donor without bringing the GWR provisions into play are given below to illustrate how we apply the de minimis test:

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Example 1

A house which becomes the donee’s residence but where the donor subsequently stays, in the absence of the donee, for not more than 2 weeks each year, or stays with the donee for less than one month each year;

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Example 2

Social visits, excluding overnight stays made by a donor as a guest of the donee, to a house which they had given away. The extent of the social visits should be no greater than the visits which the donor might be expected to make to the donee’s house in the absence of any gift by the donor;

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Example 3

A temporary stay for some short term purpose in a house the donor had previously given away, for example

  • while the donor convalesces after medical treatment,
  • while the donor looks after a donee convalescing after medical treatment,
  • while the donor’s own home is being redecorated;

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Example 4

Visits to a house for domestic reasons, for example baby-sitting by the donor for the donee’s children;

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Example 5

A house together with a library of books which the donor visits less than 5 times in any year to consult or borrow a book;

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Example 6

A motor car which the donee uses to give occasional (less than 3 times a month) lifts to the donor;

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Example 7

Land which the donor uses to walk their dogs or for horse riding provided this does not restrict the donee’s use of the land.

It follows, of course, that if the benefit to the donor is, or becomes, more significant, the GWR provisions are likely to apply. Examples of this include gifts of:

  • a house in which the donor then stays most weekends, or for a month or more each year;
  • a second home or holiday home which the donor and the donee both then use on an occasional basis;
  • a house with a library in which the donor continues to keep their own books, or which the donor uses on a regular basis, for example because it is necessary for their work;
  • a motor car which the donee uses every day to take the donor to work.