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Sometimes an IHT charge can arise on property subject to a reservation at the donor's death (I3.435), or on property which ceased to be subject to a reservation within seven years of the donor's death (I3.435). In this case the availability of APR is, if the circumstances are as described below, determined as if the occasion of charge were a transfer of value by the donee.

The property subject to the tax charge on the death of the donor (or the ending of the reservation) and which would qualify for APR, must be property comprised in the gift with reservation which qualified for the relief when the gift with reservation was originally made (having regard to the donor's then history of ownership)¹.

The tracing provisions of FA 1986, Sch 20 (I3.419–I3.420) would apply for this purpose, with the result that property representing the property originally comprised in the gift, can fall within these provisions. Indeed, it is arguable that these provisions might apply where the original property was relevant business property and the later