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I3.419 GWR—tracing changes to the property given

The supplementary GWR provisions in FA 1986, Sch 20 include a set of rules for tracing a gift with reservation which has changed ownership or which has been exchanged or altered after the original gift. The rules are relevant to determining whether the reservation still exists and on what value a tax charge arises on the donor's death or earlier cessation of the reservation.

The basic principles set out under the heading 'Substitutions and accretions' are as follows:

1. Ìý

   (a)ÌýÌýÌýÌý where the donee of a gift with reservation no longer has possession and enjoyment of the original property, any property received in substitution for that property is treated as if it were comprised in the original gift¹

2. Ìý

   (b)ÌýÌýÌýÌý these rules do not apply to gifts with reservation which become settled property, or to gifts of a sum of money²

3. Ìý

   (c)ÌýÌýÌýÌý property received in substitution includes benefits received as consideration for the original property and property received in pursuance of a right