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Meaning of 'gift'

For the gift with reservation (GWR) rules to apply, an individual must 'dispose of property by way of gift'¹. The rules cannot be applied to 'persons', such as companies and trusts, who are not individuals. See below: 'Identifying the donor'.

There is no definition of gift in the GWR provisions and HMRC states that the word must be given its ordinary meaning². This wording differs from the core definition of a transaction subject to inheritance tax, which is based on the concept of a 'transfer of value made by an individual'³.

A transfer of value is not necessarily a gift. It can be:

1. Ìý

   •ÌýÌýÌýÌý a 'disposition' which causes a fall in the value of the disponer's estate⁴, or

2. Ìý

   •ÌýÌýÌýÌý the failure to exercise a right, which causes the value of another person's estate to increase⁵, or

3. Ìý

   •ÌýÌýÌýÌý the exercise of trustees' power which causes a fall in the value of a beneficiary's estate⁶

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