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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: gifts with reservation (GWRs): the reservation: non-exclusion need not be continuous

It does not matter whether the donor’s non-exclusion commenced at the time the gift was made or whether or not it was continuous.

Even if there is no reservation at the time the gift was made or immediately afterwards, the gift with reservation (GWR) provisions will still apply if at any time during the relevant period the donor was not excluded.


Colin gives his freehold property to his son, Stuart but at the same time grants a long lease of the property to himself. The terms of the lease are genuinely commercial and provide for the payment of the full market rent which is to be reviewed regularly.

The full market rent is paid for the first ten years but thereafter is not reviewed in accordance with the provisions of the lease and ceases to be commercial. The situation continues until the death of the donor fifteen years after the gift.

This is a GWR because within the relevant period the rental which was paid did not represent full consideration so FA86/SCH20 Para6 (1)(a) does not prevent the occupation from being a reservation.