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HMRC internal manual

Inheritance Tax Manual

Liability on gifts with reservation (GWRs): introduction

The instructions in this section assume that the tax on the gift is chargeable under the gifts with reservation (GWR) (IHTM04071) provisions in IHTA84/S102 FA 1986. You need to remember, however, that a gift taxable as a GWR may also be taxable as a chargeable transfer either when made or, in the case of a potentially exempt transfer (PET) (IHTM04057), as a result of the donor’s death. Where this is the position, the relief for double charges (IHTM14711) needs to be considered.

The liability depends on whether the gift is treated as a PET (IHTM30082) or as part of the death estate (IHTM30083).