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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: gifts with reservation (GWRs): tracing: absolute gifts of cash

The special tracing rules do not apply to absolute gifts of sums of money.

If an absolute cash gift is subject to a reservation, the property taxable is the sum of money. If the donee settles the gifted cash, consider the separate instructions (IHTM14401).


John, who is a partner, withdraws capital from his capital account and gifts this to Jane, who then lends the partnership an equivalent cash sum. That sum is still on loan to the partnership when John dies.

The cash sum is treated as part of John’s death estate under FA86/S102 (3).

When a gift with reservation (GWR) might be in point

You must watch out for a gift which initially seems to be of cash that may in reality be a GWR, by associated operations, of other property.


Anna gives £100,000 cash to Bill which Bill uses to purchase Anna’s residence (worth £100,000). Anna remains in occupation until her death.

This may be a GWR of the residence.