Gifts with reservation of benefit
You'll learn how gifts with reservation of benefit work and why HMRC treats them differently for inheritance tax purposes. This topic appears regularly in Advanced Taxation exams, so mastering it is essential for passing.
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In this lesson
- 0:00 Gifts with reservation of benefit explained
- 1:04 How HMRC treats death within seven years
- 2:16 Avoiding the gift with reservation charge
- 3:23 Worked example: Reagan's house gift
- 5:20 Calculating tax with nil rate bands and taper
About this lesson
In this lesson, you'll discover what makes a gift a reservation of benefit (such as giving a house but continuing to live in it), how to calculate the tax charge when death occurs within seven years, and the practical ways to avoid this charge altogether—including paying commercial rent or demonstrating changed circumstances. You'll also work through a real exam-style question to see how to compare the original gift calculation against the death estate value and determine which produces the higher tax liability.
Duration: 6m
Transcript
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