Malcolm Finney examines the nature of a ‘gift’.
Gifts are regularly and commonly used in many areas of tax planning. Gifts between family members are, not surprisingly, extremely common. Typically, there seems in practice to be little doubt in most situations whether a gift has or has not in fact occurred, and when it was made. Nevertheless, some cases do end up in the courts.
Interestingly, the term ‘gift’ is used in the inheritance tax (IHT) reservation of benefit legislation (FA 1986, s 102) but is nowhere defined therein. Accordingly, for IHT purposes, it takes its normal meaning (see HMRC’s Inheritance Tax Manual at IHTM14315).
For capital gains tax purposes, a disposal typically involves a transfer, an assignment or some other form of divesting of beneficial ownership and includes a gift (Turner v Follett CA 1973 TC 614).
The transfer of a chattel in lifetime
