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

1. Ìý

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

2. Ìý

   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

3. Ìý

   (b)ÌýÌýÌýÌý 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),