Commentary

I10.126 Property subject to a reservation

IHT, trusts and estates

I10.126 Property subject to a reservation

I10.126 Property subject to a reservation

Where property subject to a reservation1 ceases to be subject to a reservation within seven years of the donor's death that event is treated as a potentially exempt transfer which becomes chargeable2. This means that the liability rules for potentially exempt transfers will apply to such property3, with the donee (a person in whom the property is vested or whose estate is increased) primarily liable and the donor's personal representatives secondarily liable. The same is the case for liability for tax where a potentially non-deductible debt falling within FA 1986, s 103(1) is repaid4.

Where

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