IHTM15061 | Investigation of form IHT404: Gifts with reservation

It is possible that joint ownership arrangements may involve a Gift With Reservation (IHTM14025) (GWR)

Example

Anthony transfers his house into the joint names of himself and his son as joint beneficial owners (IHTM04031) so he has made a gift of a half share of the house. Anthony then continues to live in the property without the son taking up occupation. Anthony does not pay any rent to his son for the use of the son’s half share. That is a continuing benefit to Anthony from the gift he has made to his son, so the gift is a gift with reservation of benefit (GWR).

The position will be the same if (instead of the house) Anthony transfers shares or a joint bank account into joint beneficial ownership of himself and his son, and Anthony either

• receives (or has the right to receive) all the dividends or interest for his own benefit or

• has the right to withdraw all the money in the joint account for his own benefit.