Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Capital transfer tax definition

What does Capital transfer tax mean? In practice, capital transfer tax was the UK tax on transfers of value made during lifetime and on death. It applied across England & Wales, Scotland and Northern Ireland, replacing estate duty. Introduced for lifetime transfers in 1974, the death charge took effect in 1975. The regime was statutory (principally the Capital Transfer Tax Act 1984) and used concepts such as chargeable transfers and settlements. It was replaced by inheritance tax by the Finance Act 1986, when the Capital Transfer Tax Act 1984 was retitled the Inheritance Tax Act 1984 (IHTA 1984). Today the term arises mainly in...

UK IHT: Gifts with Reservation of Benefit—statutory rules, land and co-ownership exceptions, POAT and RNRB interactions, trusts, associated operations, key cases and practical guidance

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Practice notes

History of the gift with reservation (GWR) regime

Under the former Capital transfer tax system, there were no provisions dealing with a donor keeping back any benefit from a gift, and this gap was widely and repeatedly exploited in practice. For instance, individuals might give away a house or land yet continue to occupy the home as if nothing had changed there. From 18 March 1986, the Inheritance tax (IHT) Rules introduced measures designed to curb such abuse, coinciding with the arrival of potentially exempt transfers. Over time, numerous schemes were crafted to let donors pass assets on while keeping enjoyment of them, in one form or another. Consequently, the Finance Act 2004 brought in an income tax charge on advantages enjoyed by former property owners, more commonly known as the pre-owned assets charge (POAT).

What is a gift with reservation of benefit?...

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Matthew Duncan

Druces LLP

Matthew is a Partner in the Private Client Team at Druces LLP.Matthew has an extensive private client practice, his particular expertise includes dealing with complex tax planning, trust and estate issues for both UK and international high net worth individuals and trustees.Matthew deals with complex high-level estate and succession planning with particular emphasis on entrepreneurial clients and family businesses. He has also developed a strong contentious probate, trust and disputed wills practice.Matthew is a registered will draftsman in the Dubai International Financial Centre's (DIFC) Wills and Probate Registry where he is authorised to draft and advise on the production of DIFC compliant wills. Matthew is also a professional deputy for the Court of Protection and writes a monthly feature in the Solicitors Journal....

Zoe Elizabeth Norton

Druces LLP

A solicitor in the Private Wealth Team at Druces LLP, Zoe trained at the firm and qualified in September 2023. She provides assistance to all of the partners in Druces’ Private Wealth Team and has a caseload covering estate planning and tax advice, drafting Wills, settling and registering trusts, administering trusts and estate. Zoe also assists with contentious probate matters, which she finds not only interesting but a useful lesson in what not to do when providing non-contentious estate planning advice....

Web page updated on 22/05/2026

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