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Deemed potentially exempt transfer on cessation of reservation

If property subject to a reservation (see I3.401B), or property representing it which is treated as the property comprised in the gift under the rules described in I3.419, remains subject to a reservation until the donor's death, that property is treated by the GWR provisions as property to which the donor was beneficially entitled immediately before his death. See I3.436. If the property ceases to be subject to a reservation during the life of the donor and within seven years of his death, there is a tax charge as described below.

If property ceases to be subject to a reservation more than seven years before the donor's death there is no tax charge. The GWR provisions simply do not apply at all, since the basic definition of gifts with reservation applies only to property subject to a reservation within the 'relevant period'. That is the period ending on the date of the donor's death and beginning seven years before that date