Daniel and Sophia’s article was published in Taxation, 24 October 2023, and can be found here.

Not such a free gift

Daniel Watson (Senior Associate) and Sophia Smout (Trainee Solicitor) explore the ins and outs of the gift with reservation of benefit regime. 

Gifts with a reservation of benefit (GROBs) are a notorious pitfall for people seeking to reduce their taxable estates on death.

For many taxpayers, the bulk of the value of their estates may be compromised in a small number of assets such as land or personal belongings. Gifting these assets can therefore seem an attractive route to reducing the size of the taxable estate for inheritance tax (IHT) purposes, in turn reducing the liability to IHT on death – as long as the donor survives seven years after making the gift(s).

Read the full article [subscription required]: Gift with reservation of benefit issues