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The tracing rules relating to property received in consideration for an original gift of (unsettled) property subject to a reservation do not apply where the original gift was 'a sum of money in sterling or any other currency'¹. HMRC uses the term 'absolute gift of cash' when referring to such gifts².

Therefore, where there is a gift of money, the GWR provisions can apply if the money itself becomes property subject to a reservation, but if it is spent on other property in which the donor retains a benefit, they do not apply. This element of the legislation raises a number of problematic issues discussed below:

1. Ìý

   –ÌýÌýÌýÌý how can a donor reserve a benefit in an absolute gift of money?

2. Ìý

   –ÌýÌýÌýÌý if a donor uses money to purchase a specific gift of other property, is he making a gift of money or of other property?

3. Ìý

   –ÌýÌýÌýÌý where a donee uses a gift of money to purchase other property which he then allows the donor to use,