Commentary

I3.405 Application of the GWR provisions to exempt transfers

IHT, trusts and estates

I3.405 Application of the GWR provisions to exempt transfers

Gifts with reservation—exceptions and additional provisions

I3.405 Application of the GWR provisions to exempt transfers

Inheritance tax exemptions

The core inheritance tax legislation specifies that certain types of transfers are exempt. The question arises as to whether those exempt transfers can be caught by the GWR provisions. One might assume that they would be caught because it would appear to be contrary to general policy to allow a donor to benefit from both the gift and the exemption. It is somewhat curious then to find that the GWR provisions include a list of transfers which are exempt under inheritance tax rules and to which the GWR provisions do not apply1.

These are:

  1.  

    (a)     transfers between spouses or civil partners (see I4.225)2

  2.  

    (b)     small gifts (see I3.324)3

  3.  

    (c)     gifts in consideration of marriage or civil partnership (see I3.326, I3.327)4

  4.  

    (d)     gifts to charities (see I4.215)5

  5.  

    (e)     gifts to political parties (see I4.216)6

  6.  

    (f)     gifts to housing associations (see I4.217)7

  7.  

    (g)     gifts for national purposes etc (see I4.218)8

  8.  

    (h)     transfers to maintenance funds for historic buildings (see I7.541)9

  9.  

    (i)     transfers to employee trusts (see I5.630)10

  10.  

    (j)     transfers to employee ownership trusts (see I5.630)11

This is a list of all the general exemptions listed in IHTA 1984, ss 18–28A except for the annual exemption12 and the normal expenditure out of income exemption13.

Exempt transfers to which the GWR provisions do not apply

The exemptions listed above at (d) to (g) are to be found at IHTA 1984, ss 23–25 and are those with a charitable

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