GWRB - Gift then Settlement


(Tobias Gleed-Owen) #1

I would be grateful for views on whether the following would constitute a GWRB (or create a POAT liability) by H:

Husband (H) is the sole owner of a piece of land. H gifts half of his beneficial interest to his wife (W). H and W then settle their respective shares on discretionary trusts (separate trusts) for their children, but the class of discretionary beneficiaries includes “my widow(er) after my death”. Has H therefore retained a (potential) benefit in the asset given to W?

Does the answer come down to whether H’s gift to W and W’s settlement on trust are associated operations? Does it matter whether the trustees of W’s trust actually choose to benefit H?

Many thanks in advance

Tobias Gleed-Owen
Hewitsons LLP


(Simon James Northcott) #2

I suggest s gap between the gift and the trusts, and the trusts are dated different days, but there should be no problems as HMRC are quite relaxed about this type of planning between h and w

Simon Northcott


(Paul) #3

I agree with Simon although I think opinions sometimes differ about this - I have come across some life insurance company guidance in the past which was very much against doing this sort of thing although that may have been on the basis that the beneficiaries included the spouse during the lifetime of the settlor (not as widow(er)).

Paul Davies
Clarke Willmott


(Tobias Gleed-Owen) #4

Thanks very much, that’s helpful. What length of gap would you be minded to recommend?

Tobias Gleed-Owen
Hewitsons LLP


(Simon James Northcott) #5

How long is a piece of string?!

Make sure h and w do not receive draft trust deeds and deeds to sign together and do not refer in your advice to h that W may settle her half share. Also close the file and ledger for h before dealing with W, so everything is separate and independent.

Apart from that, a couple of months?

Simon Northcott