IHTM14394 - Lifetime transfers: gifts with reservation (GWRs): settled property: donor also a trustee

The donor may be, or become, a trustee of the settlement of the gifted property. So may the donor’s spouse or civil partner (IHTM11032). This is not of itself regarded as a reservation of benefit. The spouses or civil partners hold the property in a fiduciary capacity only and are required to deal with it in accordance with their fiduciary duties.

The position is the same even if the donor and spouse or civil partner are entitled to payment for their services as trustees provided the remuneration is not excessive. This is despite the Court’s decision in Oakes v Commissions of Stamp Duties for NS Wales [1954] AC 57.

Example

Alvin transfers a control holding of shares in a private company to a trust of which he is trustee. In his capacity as trustee he is able to exercise voting control over the holding.

This would not be regarded as a gift with reservation (GWR) provided Alvin exercises the votes attaching to the shares in the interests of the beneficiaries (as he should do under trust law) and not in his own interest.