IHTM14392 - Lifetime transfers: gifts with reservation (GWRs): settled property: reversionary interests

In the case where a gift is made into trust, the retention by the settlor (donor) of a reversionary interest under the trust is not considered to constitute a reservation, whether the retained interest arises under the express terms of the trust or it arises by operation of general law, e.g. resulting trust.

Example

Alan makes a gift into trust for his children on terms that either

• expressly declare that the trust fund should revert to Alan if the children die before attaining a specified age, or
• fail to declare what should happen to the trust fund after the children’s death so that the assets would be held on resulting trust for Alan.

In neither case is there a GWR.