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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Gifts with reservation: Rate of relief on shares or securities

In most cases of assets subject to a reservation the rate of relief is determined by reference to the notional transfer by the donee at the time of the GWR charge, FA86/SCH20/para8 (1A) (b).

But in the case of shares or securities, where the date of the GWR charge is on or after 17 March 1987, you should determine whether the shares or securities are within IHTA84/S105 (1) (b), (bb), or (cc), on the basis that they remained in the donor’s ownership.

This distinction will have little practical effect given the change in legislation in 1996, which extended 100% relief to all qualifying unquoted shares.