I3.436 GWR—Charge where reservation continues until death
Gift taxed as part of the estate on death
If property remains subject to a reservation immediately before the death of the donor, then, that property is treated for the purposes of inheritance tax as property to which he was beneficially entitled immediately before his death1. For the consequences of the reservation ceasing in the donor's lifetime, see I3.435
In contrast to the difficulties of interpretation arising on the reservation ceasing during the donor's lifetime, the position where the reservation continues until death is reasonably clear.
The GWR charge in FA 1986, s 102(3) uses the same statutory fiction to bring property subject to a reservation into charge on the death of the donor, as IHTA 1984, s 49(1) uses to bring settled property into charge on the death of a person entitled to a qualifying interest in possession in it (see I5.241). Namely, it treats it as property to which that person is beneficially entitled.
The charge on death under the GWR provisions has the consequence that the following provisions apply:
(a) IHTA 1984, s 5(1), which provides that a person's estate is the aggregate of all the property to which he is beneficially entitled, except that the estate of a person immediately before his death does not include excluded property (see I4.101, I4.111)
(b) IHTA 1984, s 4(1), which provides that on the death of any person tax is charged as if, immediately before his death, he had made a transfer of value and
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