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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: gifts with reservation (GWRs): settled property: the donee and the property given

Where the gift is made by way of settlement, the donee is the beneficiary, not the trustees.

The property you should apply the gift with reservation (GWR) rules to is the equitable interest created in persons other than the donor, so that if the whole interest is disposed of, the property given is the property transferred to the trustees (less any burden imposed on them or the property). An equitable interest retained by the donor is not included in the gift.


Alan makes a gift into trust for his children on terms that either

  • do not exhaust all the beneficial interest in the property, or
  • the property should revert to Alan if the children die before attaining a specified age.

In neither case is there a GWR. In each case the donor has disposed of one interest in the property and retained another rather than given away the whole property and reserved a benefit in it.