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Gifts with reservation ― land

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Gifts with reservation ― land

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
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Introduction

Questions concerning gifts with reservation (GWR) provisions are more likely to arise in connection with gifts of land than any other type of gift. A variety of factors contribute to this:

  1. •

    typically, land and buildings carry a high value and often comprise the major asset in an estate. Gifts of land, if effective for IHT, will result in a significant tax saving

  2. •

    although the land may be the most valuable asset in the estate, the property in question may be the donor’s home, or a second property which he is reluctant to give up entirely

  3. •

    often, there is an intention to keep land and buildings in the family when the owner dies, whereas other assets will be realised in cash. This makes it difficult to make a lifetime gift of the portion that is not needed

  4. •

    land and buildings which do not produce income, present an obvious candidate for disposal, enabling the donor to retain liquid investments

  5. •

    property, such as a house, cannot easily be divided

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