Inheritance Tax: Gift with Reservation and spouse exemption

CIOT, together with other professional bodies, has been discussing with HMRC the availability of the inheritance tax (IHT) spouse exemption in relation to assets held in a trust that are treated as beneficially owned by the settlor as a result of the reservation of benefit rules.

HMRC has indicated its agreement to the analysis set out in this note and on 1 March 2021 amended the IHT manual (IHTM14303) to reflect this.