I3.559 Double charges relief—gifts with reservation

IHT, trusts and estates

I3.559 Double charges relief—gifts with reservation

I3.559 Double charges relief—gifts with reservation

The IHT (Double Charges Relief) Regulations 1987 reg 5 relieves from double charges in circumstances such as the following:


    (a)     A makes a gift with reservation1 (see Division I3.4).


    The gift is a chargeable transfer, either as a result of A's death within seven years of it or because it is a chargeable transfer from the outset (for example, it is the making of a discretionary settlement). A dies with the property still subject to the reservation2


    (b)     The facts are the same as in (a), but the reservation ceases before A's death. A dies within seven years of the reservation ceasing3

For more general aspects of the IHT (Double Charges Relief) Regulations see I3.556.

If reg 5 applies, two calculations of the total amount of the IHT payable as a result of the death of the person in question (on lifetime transfers as well as the death estate) are made. One calculation leaves completely out of account the original transfer (ie the gift with reservation), and the other calculation takes into account the original transfer but leaves completely out of the account the property subject to a reservation which is charged to IHT under FA 1986, s

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