IHTM25383 | Gifts with reservation: Rate of relief on shares or securities

In most cases of assets subject to a reservation the rate of relief is determined by reference to the notional transfer by the donee at the time of the GWR charge, FA86/SCH20/para8 (1A) (b).

But in the case of shares or securities, where the date of the GWR charge is on or after 17 March 1987 and on or before 5 April 2026, you should determine whether the shares or securities are within IHTA84/S105 (1) (b), (bb), or (cc), on the basis that they remained in the donor’s ownership.

In this period this distinction will have little practical effect given the change in legislation in 1996, which extended 100% relief to all qualifying unquoted shares.

From 6 April 2026, unquoted shares or securities traded on a recognised stock exchange or a stock exchange outside the UK which is not a recognised stock exchange will only qualify for BPR at 50%. It will therefore be important to consider whether the shares or securities fall within IHTA84/S105 (1) (aa), (ab), (ac), (ad), (b), (bb) or (cc) on the basis that they remained in the donor’s ownership.