Ending a Gift with reservation of benefit

Trusts Discussion
1

Hi All

I have a client who made a gift of a rental property in 2015 and has continued to receive the rental income. What can be done to change this from being a GROB? If they stop receiving rental income can it become a PET?

Thanks

2

Quite simply, for it not to be GROB, the donor must cease benefiting from the gifted property.
If they confirm their wish to stop receiving the income during their lifetime, the reservation ceases.
They will then be treated as making a PET of the gifted property, on the date that reservation ceased and comes into charge on their death in the same way as any other PET.

3

Had the gift been of a less than 100% share in the property, FA 1986 s 102B(3) if satisfied would have precluded a GWR from arising.

Malcolm Finney